‘Tis the season and more than just retail is seeing a shopping boom as home buyers are still going strong during what is traditionally a holiday lull in the residential real estate market. As a result eager buyers for available properties are fueling price increases in cities throughout the US.
For example, the average purchase price of homes in Pasadena, California rose in November compared to a year earlier, and is continuing a trend that took hold in the second half of 2012.
Looking to California property, in La Cañada, the average price of a home sold in November was USD $1.66 million, according to statistics compiled by agent Keith Sorem at Keller Williams in Glendale. That is a 12-month high and is nearly USD $600,000 higher than the average sale price of $1.08 million in November 2012.
While in Pasadena, the average price of a home rose from USD $726,000 in November 2011 to $894,000 last month and in La Crescenta, the average sales price was $672,000 compared with $550,000 a year ago.
Inventory is generally low and buyers remain quite active in many regions, contributing to the status of a ‘seller’s market’.
Homeowners with equity are in a great position according to Phyllis Harb, with Prudential California Realty in La Cañada.
“Sellers are able to name their terms,” Harb said, adding that sellers are making stipulations that they would usually never be able to push because sellers are so eager and are willing to agree to the terms including occupying the residence for a period even after closing.
“That might be enticing to someone who has been in their home for 40 or 50 years,” she said.
However there are of course those owners are overextended, forced out of the market and would not be able to muster up the equity to sell the property.
Such a fast moving market does not come without headaches though too.
Appraisers hired by lenders are undervaluing homes, Ed Afsharian, office manager for Podley Properties’ 60-agent real estate office said, basing their estimates on recent comparable sales recently. As prices rise, those estimates are increasingly seen as inflated by lenders.
“It is a very good market, but it is also a difficult market,” he said. “It’s like casting your line. There are a lot of fish ready to bite.”