Demand for residential real estate is picking up in Pasadena and nearby cities, but prices are lagging behind at what looks like the tail end of a years-long slide.
Local agents say that combination is prompting sellers to stay on the sidelines, and is driving buyers into tough competition for available homes.
In March, the average price of a single-family home in La Cañada Flintridge dropped to $1.31 million from $1.38 million a year ago, according to statistics compiled by Glendale-based Keller Williams Realty agent Keith Sorem. But only 65 homes were listed for sale, down from 100 a year ago.
The average price for a home sold in Pasadena was $347,000, down from $481,000 in March 2011. The steep drop may reflect that more small, relatively inexpensive homes are moving now compared to last year. In Pasadena, 143 homes were listed for sale in March, compared to 293 a year earlier.
South Pasadena had only four sales completed in March, so its jump in average price to nearly $1.8 million from $928,000 could be attributed to the sale of one or two premiere properties. Only 17 homes were listed for sale in South Pasadena, compared to 57 a year ago.
In San Marino, where 11 homes sold in October, the average price was $1.7 million, up from $1.6 million a year earlier.
Agents say the small inventory theoretically should benefit sellers. But hangovers from the market's rough couple of years are making things complicated.
Ruth McNevin, president of the Pasadena-Foothills Assn. of Realtors, said banks are still appraising homes on the low side, even though buyers are willing to pay more. That complicates the loan process.
“The appraisals documentation is lagging behind the true values,” said McNevin, who is with Re/Max Tri-City Realty in La Cañada.
Realtors expect to see an increase in values as buyers looking to take advantage of low interest rates meet a limited supply of homes for sale.
“The market has stabilized, and depending on the area, we're starting to see an increase in values,” McNevin said. “The foothills have excellent schools, so those prices have not dropped as far, and they will rebound sooner.”
Meanwhile, the expected upswing is giving sellers a reason to pause.
“People are saying, ‘I don't want to list right now because we're starting to see an increase in value, so I'm going to hold on until we gain back some of what we lost'” since the tumble from the top of the market in 2007, McNevin said.
The low inventory also means buyers aren't necessarily finding what they're looking for, said Shannon Miller with Century 21 in Pasadena.
When the market was softest, homeowners had to make sure properties were in move-in condition, with upgraded kitchens and bathrooms. Now, she said, buyers “pretty much know” they will have to make the upgrades after they buy the homes.
Fortunately for buyers, more homes should be coming onto the market in the next three to six months as banks begin selling off their supply of foreclosures, according to Irina Netchaev of Pasadena Views Real Estate.
“The shadow inventory is definitely there,” she said.