Hancock Park, Windsor Square, Larchmont Village and Brookside are small residential neighborhoods in Los Angeles developed in the 1920s. Today, the multiple listing service defines the broad "area 18” as La Brea to Western, Melrose to Pico.
What is happening in this micro marketplace?
Overall, the statistics for the first quarter of the year show that 10% more single family homes traded hands this year than the same time a year ago. The average time on market was 2.5 months, much like the prior year. Nearly 60% all sales were under $1 million versus 21% under $1 million in the prior year. Lending requirements were much more stringent, inventory was higher and a disproportionate share of homes on the outskirts of the prime neighborhoods sold, often in multiple offers.
At the high end, over $2 million 8 homes sold versus 6 in the prior year. The average price per square foot was up over 2% and time on market was about the same. The prime homes that were up to the minute done were the ones chosen. We also saw multiple offers on occasion. Given the sample size, these statistics can be misleading. So, did we have a “paired sale” (a property which sold last year and again this year)? Yes, there was a property on Windsor Square which sold for $3.1MM last March and again in Q1 ’09 for $3.25MM in multiple offers. The property had over $200k in upgrades, year over year.
A summary of the numbers:
Q1 ‘09 Q1 ‘08
Number of Sales 31 28
Median price $ 869,900 $1,502,500
Median price/sq ft $ 394 $ 685
Average price $1,290,000 $1,703,321
Average price/sq ft $ 498 $ 633
Days on market 77 81
The market dynamics have changed daily since the beginning of April. Currently there are 27 properties in escrow and 120 properties available today.
Implications for Sellers:
Proper positioning has never been more important.
Sellers must present their property in the best possible light in order to compete with other properties on the market – in your local area and citywide. Nice landscaping, a fresh, uncluttered interior and strategic pricing are critical to get selected. Spending a little extra money for finishes maybe the difference between getting sold and languishing on the market. An agent with neighborhood expertise and a solid track record of closed transactions will help you prepare your home based on real time market insights. It is important to do your homework and make sure that you hire the best local professional to get the job done in order to yield YOU the highest net profit.
Implications for Buyers:
There is a window of opportunity for qualified buyers today.
For the first time in 7+ years, there is choice. Not only is there more inventory, but there is less competition among buyers due to current lending requirements and economic conditions. This gives you time to be discerning and to make thoughtful decisions. Cash is king and can be additional leverage with sellers today. For those with solid credit and cash flow, the cost of money is near an all time lows and loans are available. There are also some Sellers who must sell and may be more flexible.
It is a particularly advantageous time for move-up buyers; you may have to sell in order to buy and possibly for a lower price than a few years ago but you will also pay less for your next purchase.
What, where, when and how to buy are the variables that together make the home buying process complex. A knowledgeable professional is essential in navigating and advising you through the intricacies of the marketplace.
Data Source: The Multiple Listing Service (themls.com) defines Area 18 as Melrose to Pico, Western to La Brea of zip codes 90004, 90005, 90020, 90010 and 90036.
