Wednesday, April 27, 2011

NELA sales data for the statophiles.

(Click to enlarge)

This is Real Estate sales data from March 2011 for Single Family Homes in Eagle Rock, Mt. Washington and Glassell Park, three of the popular communities in NELA.

In general, these are healthy numbers for a estate market. Properties are selling between 97%-102% of their listing prices. In Eagle Rock and Glassell Park, homes are on the market for around 30 days and it's around 60 days on market for Mt. Washington homes. The year over year median sales price has jumped in Mt. Washington from $449,000 in March 2010 to $555,000 in March 2011, a 23.5% increase. Eagle Rock and Glassell Park did not fare as well, both had a reduction in median sales price from 2010-2011.

We appear to be lifted out of the crash of 2009 when banks were giving away properties and inventory was sitting on the market for 120 days+. Keep in mind that roughly 50% of the people out there who want to buy homes cannot because they are self-employed and they do not qualify for mortgages. Self Employed people, who tend to be good with their finances and often are the ones with enough money saved up for a down payment, usually deduct expenses against their income on their tax returns so they have very little net income. Banks are using this net income to qualify people for mortgages so the self-employed person is usually SOL. When this large group of prospective home buyers is given access to mortgage money, I predict the buying market will see quite a bit of upward pressure due to supply and demand.

Thursday, April 14, 2011

LA Real Estate Market is almost back to the Insanity of 2005

Echo Park Feeding Frenzy-32 Offers.

I just had a buyer go over the asking price on this cute craftsman fourplex near the Echo Park lake. It is a bargain- $550k for two market rent units and two vacant ones. It was remodeled in 2005 and bought for $1.1m in 2006. At $550k with 25% down PITI payments would be about $3500 but rents would be $5500 so it's a cash machine in a great location. It makes sense that we would see some buyer attention on it but the demand was enormous. There were 32 offers on it in one week!. This is an extreme example of the multiple offers phenomon that we have been seeing since late 2009. There are relatively few listings on the market so when the banks release an REO property for sale the law of supply and demand works in their favor. This is reminding me more and more of the run and gun days of 2005 when everyone had stated mortgage financing with zero down payment and every property was getting a dozen offers. It's most amazing to me because the mortgage lenders are so tight these days and yet there are hordes of people qualifying for loans. Perhaps it is a testament to the fundamental desirability of Real Estate in Los Angeles. To buy a property in this market, be ready to act quickly and be ready to overbid!