I'm Thinking of Selling... But When and for How Much?
Every seller has two main questions when they think about selling. How much should I sell for? And when? However, if we knew how to time the market, we would all be millionaires! Unfortunately, Real Estate isn’t a perfect science, but what we do know is what is happening at the moment.
Pent up demand due to the pandemic and historic low interest rates along with historically low inventory makes the current market a “Seller’s Market” for the time being.
Now is the very beginning of the Spring Market but inventory is still quite low. Here’s a few things to keep in mind:
Pricing - Pricing a home is not an exact science but because it’s a Seller’s Market, does it mean that buyers are automatically going to ignorantly pay far more than what a house is worth? These days, when properties (LA condos or LA houses) are listed at market or slightly below market value we often see the listings going into multiple offers and selling above the asking price (and sometimes way above). The caveat is truly being realistic about the house and its market value. Shooting too high to begin is never a good pricing strategy and often leads to a home selling for less.And we have national stats to prove that.
That being said, we have seen many sellers who list at market value and have seen a frenzy going on in some parts of the city (mostly outside of Los Angeles proper). Homes in the $850K-$1.5M range are the most in demand with 10-20 offers and prices sometimes going $50K-200 over asking, depending on the home.
As a seller right now, you have leverage and many buyers are removing their appraisal contingencies from their purchase offer and offering quick closings or offering to pay some costs that would normally be paid by the seller like the, City Transfer Tax, NHD Report, Escrow fees, etc…
Condos - The condo market has seen an influx of inventory (Santa Monica & West Hollywood to name a few areas) and some sellers are expecting to sell for higher than market value for their condos and are therefore pricing them too high to begin with. However most condos right now are selling but just not as quickly and for the high prices we are seeing compared to single family homes. The idea of multiple offers and over asking sales still exists on a case-by-case basis depending on the condo and it’s location..
So is now a good time to sell?
CONDOS - If you own a condo and have to sell, yes, now is a good time. Also, if you have equity in your condo (if you have owned it for 5 years or more) now is also a good time. You must be realistic (as always) about what price is possible and prepare the condo to look as good as it can. If your condo is a gem then you may even be able to also get above asking price.
If you don’t have to sell and are thinking about waiting 6 months to a year, then you may want to wait (again, we don’t have a crystal ball).
Single Family Homes - If you own a home then, yes! Now is a great time to sell as there are many more buyers than there are houses for sale. Especially if your house is located outside the center of the city, such as the San Fernando Valley or the GSouth Bar. As the busy Spring and Summer season is around the corner, selling sooner rather than later is beneficial as your home won’t be in competition with other properties coming on the market and will be more in demand.