A Bit of Caution Amid the Frenzy
Times Staff Writer
When Bill and Barbara Harsted put their three-bedroom Norwalk houseon the market last month, they expected it would go in a snap. After all,the house was well-kept and affordably priced, in a Southern Californiamarket where bidding wars on homes are not uncommon.
Then came the reality check. The couple, already in escrow on a newhome in nearby La Mirada, sweated it out for a couple of weeks whiletheir 1,150-square-foot house created barely a ripple on the market. Itfinally sold for close to the asking price of $179,000, three weeks afterthey listed it, and after the Harsted’s compromised with the buyers.
“We lost a lot of sleep over selling this house,” Bill Harsted said.”I thought, ‘What happened? Did we make someone mad?’ ”
Real estate experts say that home buyers aren’t mad; they’re just morecautious right now, when interest rates have settled into the 8% rangeand many reasonably priced homes have been sold. There is, they say, somecooling even in a still-hot market.
“The frenzy has quieted down,” said Doug Perry, first vice presidentof the consumer markets division at Countrywide, one of the nation’slargest lenders. “Buyers are more conservative. The buying process istaking longer.”
It took the Harsteds about four months to find their new home, not somuch because they were cautious but because several of the houses theywanted to buy were sold before they had the chance to bid on them.
“It’s a dog-eat-dog market out there,” said Bill Harsted. “We found itquite frustrating.”
The Harsteds’ experience typifies the state of real estate in SouthernCalifornia as the summer selling season heads into fall. Realtors fromVentura to Riverside report that although sales of houses and condos arestill brisk--multiple offers are not uncommon in some areas--buyers alsoare showing some reluctance to jump into the market when prices are sohigh and the inventory is so low.
“A lot of buyers think we’re at the peak right now and are afraidthey’ll lose money in the long run,” said Yvonne Chien of Re/Max PremiereProperties in San Marino. “They think, ‘If I buy now, will I hate myselftwo years from now?’ ”
In Los Angeles County, the median price of existing homes rose 8.2% to$212,000 in June, up from $195,000 a year ago, according to figuressupplied by DataQuick Information Systems of La Jolla. In Orange County,the median price surged 11.3% to a record-high $295,000.
“We have the lowest inventory I’ve ever seen,” said Michael Dreyfus, aPrudential California Realty agent in Corona del Mar. “With so few houseson the market, I’ve been expecting people to be frenzied about buying ahome. But they’re not.”
Contributing to the low-inventory problem is the reluctance oflower-end homeowners to sell their houses, out of fear they won’t findanything affordable in the move-up market.
“I have clients who really, really want to sell, but they can’t buy,”said Sonny Fox, an agent with Coldwell Banker-Jon Douglas in Encino.”They keep thinking it’ll get better, but it’s not, really.”
Don’t even mention “affordable” and “Westside” in the same breath,warned Brentwood Coldwell Banker agent Suzanne Peterson. Although thesales pace has slowed somewhat in Santa Monica, Pacific Palisades andBrentwood, Peterson said, multiple offers on well-priced homes are stillcommonplace, and tear-downs in the area north of Montana Avenue in SantaMonica are going for $800,000.
First-time Southland buyers have been hit the hardest, though,Realtors say.
In Los Angeles County, the affordability index, which measures thepercentage of households able to afford the median home price, fell to39% in June, an 11.4% drop over the same period a year ago. VenturaCounty posted the greatest drop in affordability to 25%, a decline of 43%since last June.
Longtime apartment dwellers Steve Kesel, a 33-year-old teacher, andPhil Weir, 33, a speech therapist, despaired of finding an affordablehome in Los Angeles after they learned that their budget of $190,000would get them only an 800-square-foot cottage in the Silver Lakedistrict, an area they desired and believed was still within reach.
Donna Schwalm, their Encino Fred Sands real estate agent, encouragedthem to expand their horizons. She introduced the reluctant duo to themid-Wilshire district of Los Angeles, bordering Koreatown, wherebeautiful homes from old Hollywood are tucked amid quaint courtyards andsculpted gardens.
Weir and Kesel knew the moment they stepped into a mint-condition1,300-square-foot condominium that they’d found their home. Purchased for$173,000, the condo is one of six units in a perfectly maintained,Normandy-style 1936 building. There were three offers on the unit the dayit was listed.
“I still can’t believe it,” Kesel said of his two-bedroom home thatboasts hardwood floors, ornate crown moldings and wall friezes. “It’s inthe middle of a metropolitan area, but it’s on a quiet, safe street.”
For homeowners seeking a more suburban atmosphere, the Santa ClaritaValley still is within reach, according to Realtors in the north LosAngeles County region.
The median price for existing homes in Saugus was $243,000 in June, up5.7% over the same period last year. In Newhall, the median price in Junewas $220,000, according to DataQuick Information Systems.
Realty Executives President Jim Tanner said that sales in his SantaClarita office are down from last summer, which he attributes to higherinterest rates and the fluctuating stock market. But the longtime agentwelcomes a return to a calmer market.
“A less-frenzied market is better for everyone,” Tanner said. “Ipredict our market will remain strong through next year, if interestrates stay where they are.”
John Burns, a housing market analyst with the Irvine-based MeyersGroup, said the Antelope Valley is the most affordable area in SouthernCalifornia. Although only 700 new homes were built there a year ago,compared to about 4,000 a decade ago, the area is experiencing a buddingrecovery, he said.
Sales have been brisk in Riverside County, where the median home pricein June was $139,000. But despite the area’s claim to some of the mostaffordable housing in Southern California, Inland Empire Realtors reportthat sales this summer, usually a consistently busy time of year, havefluctuated wildly.
“One week I’m so busy I can’t see straight; the next week it’s dead,”said Sandy Barber, of Ward & Ward Realtors in Upland.
Barber recently listed a home she thought would sell overnight, but toher surprise, she’s received only two offers in four months. Six monthsago, the sale would have closed much more quickly, she said.
New-home building is still brisk in San Bernardino and Riversidecounties, according to Rancho Cucamonga builder Jim Previti Jr., ofForecast Homes. He credits the influx of large companies to the area withthe boom in new homes.
About 9,300 building permits have been issued for single-family homesin San Bernardino and Riverside counties so far this year, down only 2%from last year, according to Construction Industry Research Boardstatistics.
“We can never keep up with the current demand from the surge of peopleflowing into this area,” Barber said. “The people moving here are workinghere now; they’re not commuting as much anymore.”
Then came the reality check. The couple, already in escrow on a newhome in nearby La Mirada, sweated it out for a couple of weeks whiletheir 1,150-square-foot house created barely a ripple on the market. Itfinally sold for close to the asking price of $179,000, three weeks afterthey listed it, and after the Harsted’s compromised with the buyers.
“We lost a lot of sleep over selling this house,” Bill Harsted said.”I thought, ‘What happened? Did we make someone mad?’ ”
Real estate experts say that home buyers aren’t mad; they’re just morecautious right now, when interest rates have settled into the 8% rangeand many reasonably priced homes have been sold. There is, they say, somecooling even in a still-hot market.
“The frenzy has quieted down,” said Doug Perry, first vice presidentof the consumer markets division at Countrywide, one of the nation’slargest lenders. “Buyers are more conservative. The buying process istaking longer.”
It took the Harsteds about four months to find their new home, not somuch because they were cautious but because several of the houses theywanted to buy were sold before they had the chance to bid on them.
“It’s a dog-eat-dog market out there,” said Bill Harsted. “We found itquite frustrating.”
The Harsteds’ experience typifies the state of real estate in SouthernCalifornia as the summer selling season heads into fall. Realtors fromVentura to Riverside report that although sales of houses and condos arestill brisk--multiple offers are not uncommon in some areas--buyers alsoare showing some reluctance to jump into the market when prices are sohigh and the inventory is so low.
“A lot of buyers think we’re at the peak right now and are afraidthey’ll lose money in the long run,” said Yvonne Chien of Re/Max PremiereProperties in San Marino. “They think, ‘If I buy now, will I hate myselftwo years from now?’ ”
In Los Angeles County, the median price of existing homes rose 8.2% to$212,000 in June, up from $195,000 a year ago, according to figuressupplied by DataQuick Information Systems of La Jolla. In Orange County,the median price surged 11.3% to a record-high $295,000.
“We have the lowest inventory I’ve ever seen,” said Michael Dreyfus, aPrudential California Realty agent in Corona del Mar. “With so few houseson the market, I’ve been expecting people to be frenzied about buying ahome. But they’re not.”
A Desire to Sell, Limitations to Buy
Contributing to the low-inventory problem is the reluctance oflower-end homeowners to sell their houses, out of fear they won’t findanything affordable in the move-up market.
“I have clients who really, really want to sell, but they can’t buy,”said Sonny Fox, an agent with Coldwell Banker-Jon Douglas in Encino.”They keep thinking it’ll get better, but it’s not, really.”
Don’t even mention “affordable” and “Westside” in the same breath,warned Brentwood Coldwell Banker agent Suzanne Peterson. Although thesales pace has slowed somewhat in Santa Monica, Pacific Palisades andBrentwood, Peterson said, multiple offers on well-priced homes are stillcommonplace, and tear-downs in the area north of Montana Avenue in SantaMonica are going for $800,000.
First-time Southland buyers have been hit the hardest, though,Realtors say.
In Los Angeles County, the affordability index, which measures thepercentage of households able to afford the median home price, fell to39% in June, an 11.4% drop over the same period a year ago. VenturaCounty posted the greatest drop in affordability to 25%, a decline of 43%since last June.
Longtime apartment dwellers Steve Kesel, a 33-year-old teacher, andPhil Weir, 33, a speech therapist, despaired of finding an affordablehome in Los Angeles after they learned that their budget of $190,000would get them only an 800-square-foot cottage in the Silver Lakedistrict, an area they desired and believed was still within reach.
Clients Encouraged to Expand Horizons
Donna Schwalm, their Encino Fred Sands real estate agent, encouragedthem to expand their horizons. She introduced the reluctant duo to themid-Wilshire district of Los Angeles, bordering Koreatown, wherebeautiful homes from old Hollywood are tucked amid quaint courtyards andsculpted gardens.
Weir and Kesel knew the moment they stepped into a mint-condition1,300-square-foot condominium that they’d found their home. Purchased for$173,000, the condo is one of six units in a perfectly maintained,Normandy-style 1936 building. There were three offers on the unit the dayit was listed.
“I still can’t believe it,” Kesel said of his two-bedroom home thatboasts hardwood floors, ornate crown moldings and wall friezes. “It’s inthe middle of a metropolitan area, but it’s on a quiet, safe street.”
For homeowners seeking a more suburban atmosphere, the Santa ClaritaValley still is within reach, according to Realtors in the north LosAngeles County region.
The median price for existing homes in Saugus was $243,000 in June, up5.7% over the same period last year. In Newhall, the median price in Junewas $220,000, according to DataQuick Information Systems.
Realty Executives President Jim Tanner said that sales in his SantaClarita office are down from last summer, which he attributes to higherinterest rates and the fluctuating stock market. But the longtime agentwelcomes a return to a calmer market.
“A less-frenzied market is better for everyone,” Tanner said. “Ipredict our market will remain strong through next year, if interestrates stay where they are.”
John Burns, a housing market analyst with the Irvine-based MeyersGroup, said the Antelope Valley is the most affordable area in SouthernCalifornia. Although only 700 new homes were built there a year ago,compared to about 4,000 a decade ago, the area is experiencing a buddingrecovery, he said.
Fluctuation Even in Inland Empire
Sales have been brisk in Riverside County, where the median home pricein June was $139,000. But despite the area’s claim to some of the mostaffordable housing in Southern California, Inland Empire Realtors reportthat sales this summer, usually a consistently busy time of year, havefluctuated wildly.
“One week I’m so busy I can’t see straight; the next week it’s dead,”said Sandy Barber, of Ward & Ward Realtors in Upland.
Barber recently listed a home she thought would sell overnight, but toher surprise, she’s received only two offers in four months. Six monthsago, the sale would have closed much more quickly, she said.
New-home building is still brisk in San Bernardino and Riversidecounties, according to Rancho Cucamonga builder Jim Previti Jr., ofForecast Homes. He credits the influx of large companies to the area withthe boom in new homes.
About 9,300 building permits have been issued for single-family homesin San Bernardino and Riverside counties so far this year, down only 2%from last year, according to Construction Industry Research Boardstatistics.
“We can never keep up with the current demand from the surge of peopleflowing into this area,” Barber said. “The people moving here are workinghere now; they’re not commuting as much anymore.”
