Experience Counts, Especially in Transitioning Markets

Must-Ask Questions Before You Hire an Agent

By MICHAEL EDLEN | Special to the Palisadian-Post

Having noticed the changes that have gradually been happening over the last several months, it has become clear that the real estate market in Pacific Palisades is not still booming.

However, those who are frightened by the large negative headlines in the news that have many people highly concerned are most likely over-reacting to their greatest fears about the housing market.

Of course the recent series of increases in interest rates has impacted our real estate market. However, the sky is not falling, nor has it become a market that favors Palisades’ buyers over sellers yet—at least as we approach the spring season.

We have had such a long-lasting shortage of homes available as compared with the large number of financially qualified and eager, hopeful buyers that the upward pressure on prices has continued even though fewer are able to purchase homes at the price levels now prevalent.

We have looked at market trends in previous articles and will take another look before mid-year. For now, suffice it to observe that the rate of price increases has definitely slowed down, buyers have less competition when bidding on a home and, correspondingly, sellers are receiving fewer multiple offers, which are also now including more conventional contingency clauses.

Having personally experienced the three previous market adjustment cycles, I am quite aware of the skills and strategies that are most useful in representing sellers or buyers during the period of changes.

It did not take great efforts to sell a home when the inventory level averaged between two and four months, as it did from 2016 to 2022. During the last challenging market, from 2008 to 2014, we had periods when our local inventory was between seven and nine months, highly favoring buyers. A market anywhere in the country is generally considered to be in balance between buyers and sellers when that level is five to six months.

As of the beginning of March, the Palisades’ inventory of homes available has steadily increased from two to five months since May of 2022. The monthly rate of sales has slowed down significantly, and with this change, we will probably have a market again in balance by April.

Also, as interest rates are likely to be stable or slightly rising in the near-term future, and prices have reached levels where fewer buyers are able to be approved for financing, it will probably take longer for homes to sell. For the last year, the average time on market here was around 20 days. It could be twice that long within a month or two.

In previous articles we have provided a series of questions for sellers to ask potential agents before deciding which one to entrust the responsibility of selling their home. These are readily available on our site or by request.

Recently a potential home seller asked me the following questions in his process of narrowing the field before deciding who to hire for representing his family:

1. Have you been in real estate since before 2010?
   
2. How many listings have you personally had in the last three years?
   
3. Have you personally actually sold more than five of your listings in the last three years?
   
4. What is your escrow fall-out ratio? What percentage of them have closed?

The real estate market tests agents by performance over time. Working with an agent who is among the most qualified is even more important especially during periods of significant changes like are now in process.

Experience may lead to sales at a higher level and in fewer months, as well as with less challenges and difficulties during escrow.

Michael Edlen has been a trusted real estate advisor in the Palisades for 37 years. He and his team of specialists have worked together for more than 20 years in helping clients achieve success 95%-plus of the time. More information is available on their website, edlenteam.com, or by contacting michael@edlenteam.com or 310-600-7422.