Timely real estate news……………………………………………. 14 February 2007
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And you thought the day for multiple offers were over. Not so. Buyers are hungry.
This week, a four-bedroom Brentwood home with a pool on a big lot South of Sunset, and West of Barrington was listed for $1,875,000 and guess what? Yup….this listing had 24 offers in three days! This home, in good shape, was obviously well priced. Just down the street, another house closed escrow this week, and it, too, sold with multiple offers for $400,000 over asking late last fall. While we don’t know the final sales price (not until escrow closes), we can safely assume this week’s transaction fetched more than the listing price….my CB office in Brentwood was abuzz for the day. We haven’t seen that many offers on a Westside home since the frenzy-feeding days of last spring.
What does this tell us? 1) There are a lot of buyers out there who understand value. Value means location, price, quality, functionality, future, and 2) confidence in market and economy. The market continues to reach new heights, and there is continued, strong confidence in the economy.
The most important fact that events like these tell us is that the perceived value will always drive the demand — if they feel the price is too high, houses will sit. But if they are appropriately priced, they will generate buyers at your doorstep.
If a property comes on the market, higher than the buyers think it should be, the first question I get is: How much flexibility is there in the price….meaning we have a very educated consumer in the market these days. Buyers are better informed and more diligent in their research…a fact you may not know: Buyers who their research online before they contact a Realtor see only 6.5 homes before making a purchase…those who shop the traditional way, visit 14 homes before they make a decision. What this tells you is that generally buyers are smarter and know what they want before they enter the marketplace.
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Mortgage rates rose .125% last week, but held steady this week after strong economic news. What does this tell us? Regardless of minor increases in mortgage rates (that are still low compared to history), buyers are going to find a way to purchase the home of their dreams.
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Notices of Default (the first step in the road to foreclosures) and foreclosures are up. What does this tell us? Negative amortization and interest-only loans haven’t panned out in areas where there is little or no appreciation in property values….hence, no equity. There have been few foreclosures on the Westside, and there may be some more, but with interest rates as low as they are, most homeowners facing foreclosure can re-finance and save their home. So what that tells us is that the owner is probably unrealistic in their asking price if they are trying to sell the house, the bank doesn’t want to work with them, and may be unrealistic as well. Contrary to public perception, foreclosures are not always the bargain they seem to be. You will really need to know what you are doing, and have an agent who is experienced in buying foreclosures. I know I have bought and sold a few in my day, including some for myself!
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What are the latest MLS numbers telling us for Brentwood, Bel Air and Beverly Hills? In summary, there is good news for Bel Air compared to January 2006 —median sales prices went up 6% for last month….Beverly Hills was down 9% and Brentwood down 2.%% compared to the same time period. Overall, price appreciation is holding steady in all three of these areas — Brentwood and Beverly Hills were up last year over 2005 at this time (around 5%) while Bel Air was down 17%….so overall, the market is back to normal, and price appreciation remains strong.
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The Glass Finally Arrives….
The anticipation was killing me for the past week — the glass sculpture I purchased from one of Europe’s foremost artists, Ales Vasicek, was due to arrive on Friday. This magnificent glass work, which measures 45 inches wide by 18 inches high, immediately caught my eye when I entered his studio in Prague last October. I had to have it and decided to buy it on the spot. Only after agreeing to the purchase it did I hear the artist’s name for this smoky, grey-colored sculpture — “Smog”. Given where this beautiful sculpture was going to have its final resting place — here in the heart of Los Angeles — I thought the name was most appropriate. We all had a chuckle, and frankly, now that it sits here on its pedestal in my dining room, I only think of how beautiful Prague is and what wonderful memories I have from my trip last fall. Happy glass hunting….off to plan my next adventure!