Los Angeles Real Estate Blog

The South Bay Real Estate Market Authority

From the desk of Greg M. Ingerson, Attorney At Law

During the Spring season, South Bay home sellers should begin to see a gradual decrease in the number of showings and inquiries for their home over the next few weeks.

Last month, the MLS summary showed that there were 2293 homes for sale in South Bay and 170 sold. Translation, under current market conditions, in any given month, you have about a 1 in 14 chance of selling your home.

In other words, when pricing your home, the practice of adding a "Pad" or "Cushion" to make room for negotiating is not advisable in this market.

As an informed Home Seller, you should understand that with an increase in inventory “supply” there is a corresponding decrease in demand.

Home Sellers should pay close attention to “Current Buyers.” Similar homes that have recently “Sold” tell us what people are willing to pay for this kind of home, in this area, at this time.

Information about similar homes “Currently for Sale” tells us what we are competing against. Buyers considering your home are also inspecting these homes.

Moreover, “Expired” listings tell us what people are not willing to pay for this kind of home, in this area, at this time.

Home Sellers in this market should realize that buyers in today's market will not overpay for a home and even if they would, the bank will not loan more than the home is worth when it doesn’t appraise.

So what can we expect? Demand should decrease a little over the coming weeks at least until the “sub-prime” mortgage meltdown crisis is figured out.

The Numbers Don’t Lie, Here Is What's Happening:
On March 1, 2008, there were 2293 active listings for sale in the South Bay Market (Areas 107-193): 1460 Houses; 502 Townhouses; and 331 Condominiums.

In the past year, there were 4551 homes sold in South Bay (between 3.01.07 and 2.29.08): 2867 Houses; 1154 Townhouses; and 530 Condominiums.

What this means is that on a yearly average, the inventory is currently turning over at a rate of approximately 2.0 times per year.

Broken down even further by specific property type, we find that given the current absorption rates, we can expect Houses to be on the market an average of 183 days, Townhouses will be on the market an average of 157 days, and Condominiums should be on the market an average of 225 days.

Market Recap for the Month of February, 2008
When one compares the February results with the yearly result, we find that there is an approximately 13.5 month inventory of homes for sale in South Bay.

Broken down by specific property type, we find that there is a 12.4 month inventory of Houses, a 14.3 month inventory of Townhouses, and a 18.4 month inventory of Condominiums on the market in South Bay. (Based on current absorption rates).

How should a Seller approach the market? The key in today's market is proper pricing. If you are thinking of selling, now may be the best time to put your Home on the market for the foreseeable future before any additional interest rate increases are implemented.

How should a Buyer approach the market? For buyers, this is a good time to be in the market while sellers are willing to negotiate price and while interest rates are still low. For those hoping that the market will cool, any advantage obtained by waiting for prices to decrease may be offset by higher interest rates.

For more information regarding the South Bay and/or greater Los Angeles Real Estate Markets, please visit our website at http://www.LAHomeSearch.com for FREE information or give our office a call at 310.908.2172 for Free Recorded Information 24 Hours a Day.

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South Bay Home Sales by the Numbers
170 sold in February 2008
385 sold in February 2007

2293 Current Active Listings
1460 Houses
502 Townhouses
331 Condos

170 Sold in February 2008
117 Houses
35 Townhouses
18 Condos

451 Contingent & Pending in February 2008
307 Houses
91 Townhouses
53 Condos

206 Expired in February 2008
125 Houses
49 Townhouses
32 Condos

385 Sold in February 2007
233 Houses
108 Townhouses
44 Condos

309 Sold in February 2006
196 Houses
75 Townhouses
38 Condos

434 Sold in February 2005
270 Houses
102 Townhouses
62 Condos

421 Sold in February 2004
251 Houses
102 Townhouses
56 Condos

469 Sold in February 2003
291 Houses
122 Townhouses
56 Condos

539 Sold in February 2002
338 Houses
127 Townhouses
74 Condos

463 Sold in February 2001
280 Houses
111 Townhouses
72 Condos

389 Sold in February 2000
265 Houses
68 Townhouses
56 Condos

118 Expired in February 2007
83 Houses
18 Townhouses
17 Condos

137 Expired in February 2006
97 Houses
24 Townhouses
16 Condos

57 Expired in February 2005
35 Houses
17 Townhouses
5 Condos

60 Expired in February 2004
47 Houses
7 Townhouses
6 Condos

85 Expired in February 2003
65 Houses
10 Townhouses
10 Condos

96 Expired in February 2002
67 Houses
21 Townhouses
8 Condos

90 Expired in February 2001
61 Houses
22 Townhouses
7 Condos

90 Expired in February 2000
68 Houses
11 Townhouses
11 Condos

Los Angeles Real Estate http://www.LAHomeSearch.com

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About the Author
Greg M. Ingerson, Attorney At Law & Real Estate Broker, is a real estate Broker with LA Home Search in Los Angeles, California. To learn more about the Los Angeles Real Estate Market, please visit http://www.LAHomeSearch.com