By MICHAEL EDLEN | Special to the Palisadian-Post
We have received an increasing number of calls from local homeowners wondering if now is a good time to sell, or if waiting until next year might get them even higher prices for their homes. Many have assumed that since everything seems to sell rapidly, it is easy to get top dollar—no matter where the home is located or what condition it is in.
It is true that the prices of homes in and around the Palisades have reached all-time high levels, and most people are aware of how frustrated many buyers are in their efforts to buy a home now. As long as interest rates remain near all-time historic lows, it is probable that upward pressure on prices will continue for at least some months longer.
However, as those rates have inched up slightly and, at the same time, home prices are up about 10% as compared with this time last year, fewer buyers are able to compete in buying the dream homes.
The median price of local homes sold so far this year is $3,725,000. This is quite different than the current median asking price of all homes now for sale here, which is an astounding $6.15 million.
It may be useful to consider the side of the market that never makes the news: those homes which are listed for sale but never get sold in the current market period. The assumption that it is easy to sell any home and get top dollar has proven to not be a true idea. For example, of the 400-plus Palisades homes that were listed during the first seven months of 2021, about 20% failed to sell or lease so far.
It is also of some use to note that there is a significant division in the market. At the current rate of buying, it would take only one and a half months to sell all the Palisades homes available below $5 million; whereas it would take nearly seven months to sell all the homes for sale priced above $5 million.
A market is in balance between buyers and sellers when the level of inventory is five to six months. When there is more than a six-month supply of homes available at the then current rate of sales, a market is considered to be more favorable to buyers. Such is the case now above $5 million.
A close examination of the approximately 80 homes that did not sell or lease so far this year shows that both their median and average list prices were significantly higher than the 200 homes that were sold. In fact, it appears that they were priced higher than the market was likely to bear by more than 35%.
Of course many of these non-successful listings were merely verification that the price point they hoped to achieve was unrealistic. As we have seen over decades, many owners of homes in the higher price tiers have a much lower motivation level, so they might be less committed to selling at the time.
One conclusion that may be drawn from these observations is that everything does not sell, even in such a strong market as we have been experiencing. As the market begins to adjust to a lowering of buyer demand and affordability at some point, it will logically become increasingly more difficult to sell. Until then, it looks like the more affordable homes will continue enjoying a strong demand for some time to come.
Michael Edlen has kept track of different neighborhood and price range activity in the Palisades for 20-plus years, which has been useful in helping people set prices at the most effective level for maximum results. He can be reached at 310-600-7422 or firstname.lastname@example.org.
Huge Increase in Number of Homes and Condos Being Sold
By MICHAEL EDLEN | Special to the Palisadian-Post
As of August 1, there were 82 single-family Palisades residences listed in the Multiple Listing Service, which is 12% lower than at the start of August 2020. So far this year, 235 Palisades homes have sold, which is a 126% increase from this time last year. There are now 40 homes in escrow in the Palisades, which is the same as a year ago.
The average price per square foot ($1,256) is 9% higher than this time last year. The lowest-priced available home is a two-bedroom, two-bath on Sunset at $1,995,000. The highest-priced property is a seven-bedroom, 12-bath on Amalfi Drive, asking $46.5 million.
The lowest sale price so far this year was a two-bedroom, two-bath on Sunset, which sold for $1.47 million. The highest sale so far this year was a six-bedroom, 18-bathroom in the Riviera, which sold for $83 million in an off-market deal.
There are now 17 condominiums/townhouses on the market, a 39% drop in inventory. They range from one-bedroom, one-bath on Sunset offered at $629,000 to a five-bedroom, six-bath unit on Tramonto asking $5.11 million.
Fourteen condos are currently in escrow. There have been 62 condo sales so far this year, which is a 94% increase over last year. The lowest was a one-bedroom, one-bath on Sunset, which sold for $625,500, and the highest was a three-bedroom, four-bath on Tramonto, which sold for $5.3 million. The median condo sales price is $1,317,500, which has increased by 22% from this time last year.
There are currently four pieces of raw land available, ranging from a 900-square-foot lot on PCH (for a manufactured home only), being offered at $375,000, to $10,595,000 for six lots totaling approximately one acre on Sunset. Two lots have sold this year, and one is in escrow.
There are now 34 available leases in the Palisades, which is a 53% dip in inventory. They range from a two-bedroom, two-bath condo on Sunset asking $3,600 per month to a six-bedroom, eight-bath on Amalfi Drive asking $75,000 per month.
There have been 172 leases so far this year—46% higher than this time last year. The highest lease so far this year was a seven-bedroom, 10-bath home on Amalfi Drive, which leased for $75,000 per month, and the lowest was $1,895 per month for a one-bedroom, one-bath on Sunset. The median was $9,250 per month, which is slightly up from this time last year.
Michael Edlen, an agent with Coldwell Banker, has been keeping statistics on Pacific Palisades housing prices for the last 34 years.
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