When Caryn and I moved to LA 5 years ago we almost bought a house. A 3 BR hillside place in Mt Washington for $350K. We decided against it at the last moment and thought it would be best to get a feel for the city first then buy something. We try not to talk about that decision. Ever. For obvious reasons. The last few years we’ve seen the houses in our Silver Lake neighborhood go from $500K to $750K to $1.3M. We’d see houses go up for sale, and within days the signs would be gone and people would be moving in. Last week we were driving around and noticed that not only were the signs not disappearing as fast, but there were tons more of them. Houses aren’t selling as quick, and there are more of them to choose from. AOLer Jason Calacanis is seeing the same thing:
“Two years ago when I started looking it was the buyers were in a panic. You were told to make an offer within a day of seeing a house, and to send a letter to the owner about how privileged you would be if they would sell you their home. Of course you should offer 10% more than the asking price–you don’t want to be rude!
When we looked last week three of the eight houses were “flips” by real estate brokers. That is, houses they bought, remodeled and were no reselling. Those three “flips” were on the market for 30-120 days and had all been recently reduced 10-15% from their original asking price. Within 10 minutes of walking in each of the brokers said they had room to work, and that they could make changes to the home (i.e. we could put a room here or a pool–whatever you want).
The most telling part for me was that the brokers themselves are looking to get out. They want out so bad that they are willing to reduce the price by 10-15% not once, but twice, over ~60 days.”
Could prices be headed back in a reasonable direction? That sure would be nice for those of us still writing monthly rent checks.