by Yvette Betancourt
According the C.A.R (California Association of Realtors®), homes that have been priced right and the record-low interest rates are making the market competitive that six out of ten homes are receiving multiple offers.
In 2012, 57% of homes sales were in a multiple offer situation that included lower priced homes and distressed properties (bank-owned real estate REO, short sales, etc.). These properties had more multiple offers than market sales.
The multiple offer has led homes to be higher home sales than the originally asking price. Also, homes are also sold faster than market sales taking about 32 days compared to the average of 67 days in 2011. REOs are sold in 30 days than the 50 days average of last year! Short Sales market days has not change due the complexity of the short sale process but the average of days are 90 days than 141 days from last year.
My question is, who is the buyer? Are they cash investors or future home owners?
In 2012, a third of homebuyers paid with all cash and 16% of buyer bought for investments purposes. International buyers are making up 5.8 percent of buyers with the largest group of buyers coming from China, Canada, India and Mexico.
The good news is that 77% of buyers are purchasing a primary residence that include 40% of first time home buyers. Most first time home buyers are purchasing REO property or a short sale.
Due to the current tight lending, few buyers have a second mortgage. In 2006, 43.4 percent of home sales were bought with second mortgage. In 2012, 1.8 percent. What a big difference.
The fierce market conditions have forced buyers to complete with all-cash offers and investors and making it difficult for first-time buyers to become homeowners.
In my current experience, homes in the San Fernando Vally that are under $450,000 have been in a multiple offer situation since February 2012. If you are a buyer who is looking to place an offer lower than listing price, chances are your offer will be over looked due to offers at listing price or over listing price. Yes, these properties need TLC and there are no credits for repairs however, the days of bargaining with homes, especially distressed properties are very slim. Home buyers, please don't get discouraged! I've seen cash offers be outbid by offers with a loan. Remember, the highest purchase price and best terms will appeal to the sellers. As for home sellers, if you need time to relocate or find a new living arrangements, add the time frame to the listing contract.
If you have any questions, please contact me at (818) 384-5928 or email.
