One-third of LA homes sell above asking price
How much above? Around $14,100—more than twice the national median, as measured by the real estate website.
Across the country, nearly one-quarter, or 24 percent, of homes sold above the price that the owners were asking in 2017; in the Los Angeles metro area, the figure was 38 percent.
That’s the highest share since 2013, when home values were just beginning to recover from the mortgage crisis of 2008.
LA’s share of homes selling above sticker price has also risen in each of the last three years, suggesting that competition among homebuyers is heating up.
“You’ve got to move quickly if you’re a homebuyer,” says Jordan Levine, senior economist for the California Association of Realtors. He tells Curbed that underwhelming levels of new construction in the LA area have kept the number of homes on the market relatively low. According to Zillow, the number of homes for sale in the LA area declined 22.8 percent last year.
At the same time, a strong economy and low interest rates on home loans are bringing plenty of buyers to the market. By Zillow’s reckoning, the typical LA home now takes 66 days to sell (including an escrow period); that’s well under the 91 days that homes last on the market nationwide.
High demand and low supply is driving up prices to the point that sellers may often undervalue their homes when putting them on the market, explains Zillow senior economist Aaron Terrazas. He says that sellers are often “pleasantly surprised” when homes fetch prices significantly higher than their asking price.
Still, Levine says that rising home values may actually be causing some homeowners not to sell, out of fear they may not be able to afford something better. It’s a seller’s market, he says, “unless you want to turn around and buy again.”
This trend further limits the number of homes available for purchase—meaning that high costs and competition among buyers may be here to stay. (reprinted from Curbed LA)