Wonder how our local market faired for 2013? Here are some of the results

First of all, please allow me to  wish you all a very Happy New Year; I hope the holiday season was wonderful for you and yours.

Over the course of 2013, I wrote a number of times here about the activity in our local real estate market. During the early months of 2013, the market caught fire, with the result being escalating prices, bidding wars, and multiple offers on properties, often times over the Seller’s asking price.

(818) 522-8378Right around late spring-early summer, things started to cool down a bit. There was a sense of buyer fatigue with the frantic rising prices, as well as the initial signs of increases in mortgage rates. The pace was still good; just slower than a few months earlier. Homes for sale sat on the market longer than they might have in previous months. By the end of 2013, our local market seemed to find its pace, and while homes were still selling and increasing in value, both were happening at a rate that was more, if I may say, “normal.”

So what happened? Well, looking at the year as a whole; it was a very good one. And as a quick sidebar— the numbers I will be citing are numbers I generated specifically for those reading my newsletter. These are not national or even regional numbers; they are specific to the cities where I mail my newsletter.

Ok… so here we go. In the early months of 2013, we saw increases in prices compared to 2012 that were well over 20-percent. It got a little crazy for a while, because most of the increases happened in a 60-120 day period.  Most of the increases were driven by mortgage rates that were in the low 3s. The mortgages were so affordable, that it reached a point were buyers were less interested in the price of the home, then they were the monthly cost of the mortgage. Many figured of they can afford the monthly payment, than they were more than willing to offer the Seller more than the asking price.  Inventory was down, which fueled the fire as well.

Homes sold about 30% faster in 2013 than the year before. What used to take around 75 days to sell in 2012, was taking just about 50 days last year. Another good sign; distressed sales were WAY down. In 2012, roughly 30% of all homes sold in our market were distressed sales; that number dropped to about 13% in 2013. Some of the reason for that was owners were recapturing some of their lost equity as prices rose, so what might have been a short sale in 2012, was no longer one a year later. A number of mortgage relief programs helped stabilize that aspect of our market as well. With fewer foreclosure and short sales happening, neighborhood values were less effected by the drag down effect distressed sales can have on the homes around it.

Nearly half (45%) of all the homes that sold in 2013 were in the price range between $300,000—$700,000. That group enjoyed a healthy 5-percent increase in value compared to 2012. The news was the similar for the entry level-mid range priced homes ($300,000—$500,000); that group represented  about 20% of the market, and also saw their properties go up around 5-percent in value.

Homes in the $700,000—$1,000,000 category, were good for about 25% of the market sales. The price performance in that group was up right around 3-percent. It isn’t unusual for the higher priced homes to increase in value at a slower pace— one of the reasons is the pool of buyers for these homes is a much smaller one. Of course, there’s always the exception. Homes that sold for between $1,000,000—$1,100,000 represented under 5-percent of the homes sold last year; however, that small group saw a 13-percent increase in their home values. Homes priced over $1-million dollars accounted for about 30% of the sales in 2013; a pretty good chunk all things considered. In my opinion, the reason for that is the low mortgage rates which made a million dollar plus mortgage a lot more accessible than in years past, paving the way for a new legion of million dollar home owners.

Property values steadily up, distressed sales way down, mortgage rates on an even keel despite the recent increases, all add up to a year of good recovery for 2013, and what looks to be a good path moving into 2014 whether you’re buying or selling.


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Categories: LATEST NEWS

Author:Marino Real Estate

Specializing in residential and commercial real estate sales for the better part of a decade, my approach to real estate involves establishing a trust with my clients, that contributes to the ultimate success of our transaction. Whether it is a personal residence, or an investment property, I am committed to negotiating the best deal for my clients, and have enjoyed a history of meeting the important and unique needs of the many clients which have entrusted me with thier real estate goals.

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