By Michael Edlen | Special to the Palisadian-Post
When all the changes began suddenly just six months ago, few could have realized the remarkably rapid pace of so many different elements impacting the sale and purchase of homes.
For a couple of months, the rate of activity fell about 50%, and the real estate industry was forced to invent and then re-invent new procedures and protocols to comply with the quickly changing landscape.
Since then we have seen an equally remarkable snap-back that has brought sales activity almost to the level of how March had begun. Multiple offers are once again quite common, and inventory is not quite sufficient to meet the steady demand of buyers who continue to benefit from interest rates at near 60-year low levels.
The level of online viewings has dramatically increased since June 1, and we have been receiving a larger volume of showing requests week by week.
Although the rate of sales per month has been averaging less than at this time last year, the overall market has not shifted to a “buyer’s market” because, as of now, not enough homes have been placed on the market.
As of the end of August—and calculating based on total sales since April 1 (a full COVID five months)—we now have an inventory level that would take six months to sell at the current rate. In general, a market is considered in balance between buyers and sellers when that level is between five and six months.
It may be of interest to note that while the median average Palisades sales price is about $3.4 million, the median average list price is over $5 million. Correspondingly, while there is about a six-month level of inventory in all price ranges combined, it is only three months for listings priced below the $4 million level. Thus we continue to have a strong “seller’s market” in the Palisades up to the $4 million range, and this is likely to continue as long as interest rates remain near historic lows and inventory does not increase significantly.
Conversely, it has become a strong “buyer’s market” at the high end, with more than a year of inventory above the $6 million level. In fact, nearly 40% of the homes for sale today are listed above $6 million.
Despite the inconveniences of viewing homes in person in the COVID environment, the brokerage community has managed to adjust well to the requirements and steps involved to arrange and conduct showings.
For those who cannot wait for things to “get back to normal,” they will soon begin to see that we have entered into a “new normal” period in real estate, as well as so many other aspects of daily living. Many of the changes are rapidly becoming a part of the fabric we must become accustomed to.
Virtual online tours of one form or another have become almost a necessity as part of the marketing of a home. 3-D tours are rapidly becoming commonplace too, as are aerial drone photos to give a closer feeling to what the property and its surroundings are like.
And while Sunday open houses are no longer possible to do in person, video tours and FaceTime viewings can accomplish much of the same benefits for people who are seriously looking to buy a new home.
Any agent who is not willing or able to adjust for these and other “new normal” conditions and realities will gradually become functionally obsolete. Likewise, any seller who is not flexible enough to “go with the flow” of what is required to sell a home during pandemic conditions will discover that they will have less success in the sales process.
Michael Edlen and his team have successfully sold and leased many properties during the COVID period. They are available for complimentary consultation about the processes and issues involved, and have more detailed information available on their site, edlenteam.com. You can reach him at 310-600-7422 or michael@edlenteam.com.
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