Altadena Real Estate Update Increased Interest Rates have Limited Impact on Local Market The

Post on: 3 Сентябрь, 2015 No Comment

Los Angeles Real Estate and Community News

Altadena Real Estate Update: Increased Interest Rates have Limited Impact on Local Market

There is a buzz in the industry amongst buyers, sellers and clients alike as to the impact on sales activity due to nearly a 1% increase in interest rates over the last 90 days. Additionally there is a concern over how the pending change in the conforming rate limit may impact the market and more specifically home prices in the Altadena real estate market.

The National Association of Realtors reported that pending sales activity (The Pending Homes Sales Index) eased in August 1.6% from the previous month, but sales activity still remains 5.8% above The Pending Sales Index from August, 2012. Overall, pending sales have been above average for the last 28 months. NAR’s Chief Economist, Lawrence Yun, states that “Sharply rising mortgage interest rates in the spring motivated buyers to make purchase decisions. culminating in a six-and-a-half-year peak for sales that were finalized last month.” The question remains, what has been the impact on the local real estate markets?

Despite the fact that interest rates have risen, and the pending change in the conforming rate limit, there has been little impact on the local Altadena real estate market. In fact, the following conditions still apply to the local market place.

Limited inventory – The number of available homes for sale is still very low. The result is that well priced homes are selling quickly.
Multiple offers Well priced homes are receiving multiple offers. Although a seller may not receive as many offers as in months past, a well priced property in a good location is still earning single digit offers as we enter the fall selling season.
More realistic pricing – In the spring and early summer months we saw many sellers listing their homes with “shooting for moon prices. Most recently sellers appear to have become more realistic in their asking prices resulting in more timely sales.
All cash offers – A recent survey by NAR indicates that approximate 30% of all residential sales are “cash” buyers. This buyer is typically an investor or international purchaser. The same is true in our local marketplace. A recent review of my own sales activity in the last 12 months shows that nearly 35% of the buyers and sellers I have represented paid for the property all cash. Of this 35%, 70% were investors and foreign buyers. The other 30% were buyers who are selling another property and moving up or down in the local market place.

Although interest rates will go up over time, there is good reason to believe that rates will not change dramatically over the next several months. Additionally, inventory levels should remain relatively static until we approach the early spring market of 2014. If these assumptions hold true, sales activity should be relatively strong over the remainder of 2013 and early 2014.

On Caravan this past week there were several well priced homes in the Altadena real estate market. One that really caught my attention was 1958 Pepper Drive. This single level tradition is located along a highly coveted NE Altadena street. This wonderful home offers generous-sized formal rooms with French doors that lead out to a patio area. The light-filled and remodeled kitchen opens to the rear garden. What I liked most about the property in addition to its location, is the flow for entertaining and the rear garden with mountain views.

This would be the top of my list if I were a buyer seeking a home with a list price of under $800,000. My sense is that this seller will earn a sales price reaching towards the mid $800,000! Correct pricing and great condition, coupled with a high demand location is the right formula to maximize a sellers sales price!