Recently, there have been some positive housing-related stories in the mainstream media. Following the surprising increase in construction spending and better-than-anticipated existing house sales, pending home sales increased by 6.7% in April, the largest increase since October 2001. In May, existing house sales increased by 2.4% to a seasonally adjusted annual rate of 4.77 million units from a downwardly revised pace of 4.66 million in April as a consequence of higher pending home sales. According to a March Wall Street Journal analysis, California is driving the West's revival of existing house sales, and interestingly, some of these strong revivals are in the hardest-hit regions. What, then, is happening with more desirable regions, particularly in the West Los Angeles and Beverly Hills real estate markets?
I urge every prospective homeowner to read the LA Times story "Purchasing a home? Not all markets are competitive for buyers "Chip Jacobs is the author. The essay was both highly intriguing and somewhat accurate, in my opinion. It discusses how highly sought-after districts like Culver City, West LA, or Santa Monica have strong demand, and how the well-priced residences there receive numerous bids and occasionally sell for more than the asking price.
I concur that many buyers erroneously interpret and/or overreact to housing or real estate statistics reported in the media. The real estate market cannot be generalised, as I previously stated. It's all about where you are. I've seen purchasers who want to make offers on well-priced bank-owned properties in prime locations that are 30–50% below the asking price. Buyers claim that because prices are falling daily, banks are forced to sell their portfolios at rock-bottom prices as the economy continues to deteriorate. I've read in periodicals and on CNN.com that prospective purchasers should set their first bids at a discount of roughly 20%. Come on, initial bids don't have a predetermined formula. If you are serious about purchasing the house, you must take into account a number of criteria before submitting an offer. I can assure you that lenders do not consistently sell all of their properties for 20% or more less than what they are asking. Although some properties are priced at or even above market value, the majority are frequently below similar market values. Naturally, your chances of negotiating with the seller and getting a fantastic price increase the longer the property has been listed or the more significant repairs need to be made. The property's location, though, will determine your initial offer the most. You should be aware that properties in highly sought-after locales are in high demand. I have personally participated in multiple bidding battles for my customers' properties in highly sought-after regions, and they have all been sold for far more than the asking price. At the intersection of Wilshire and Manning in the Westwood neighbourhood, a bank-owned condominium was recently listed for sale for $879,000. The bank received multiple offers, probably ten over the asking price, and all in cash in a matter of days. One of those all-cash offers was made by my client, and the bank sold the condo for $1,080,000 all-cash with no conditions. Escrow was finalised in two weeks, which is almost $200K above the asking price. Another illustration is a tiny Brentwood fixer-upper that was advertised for $615K in November of last year. The lender sold it for $740K in cash as opposed to my client's $700K all-cash bid.
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