L.A. First-Time Home Buyers Shooting at Shrinking Targets: Buyer's Market Ha!

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Real Estate Agent with 310-508-4354 | FirstTimeHomeBuyerRealEstate.com BRE# 01728424

L.A. First-Time Home Buyers Shooting at Shrinking Targets:  Buyer's Market Ha!

It was bound to happen!  There had to be a slight shift from buyers' market to sellers' market in quite a few areas of Los Angeles county where my buyers are currently looking.  When working with first time buyers in the $450,000 or less range, one does tend to open one's self up to a large pool of buying competition because let's face it, the buyer that can afford $600K, can also afford $450K as some buyers are wisely looking for homes they can afford on one income level if future circumstances should force it.

As I am househunting with buyers in several different parts of LA county, I'm seeing the same thing happening no matter where we go, shrinking inventory and multiple offer situations.

The past three weeks of searching with some of my 1st time home buyers looked a little something like this:

First time buyers looking in the Northeast LA target cities of Alhambra and Highland Park: multiple offer situation after multiple offer situation.  We initially found a great home, got an accepted offer, one of the two buyers then decided he wanted more bling for the price.  He wasn't budging after 3 days of talks and we ended up withdrawing the offer as seller couldn't accomodate.  Now 3 weeks later, one buyer is peeved while the other now regrets decision because the competition is not only fierce, they also have bigger pockets!  I bet the other house is looking a whole lot better than the doghouse he's currently in.  Yikes!

First time home buyers looking in Los AltosCalifornia Heights, Bixby Highland areas of Long Beach, and Lakewood Village, Lakewood Mutuals, Mayfair areas of Lakewood: faced with multiple offer situations on both turnkey and fixers.  I had one agent in Los Altos tell us during an open house that her last set of buyers submitted 11 offers before they were able to get in escrow in the same area and that had been an easy buyer for her.  This wasn't what my 1st time buyers wanted to hear, but at least it helped them to know theirs wasn't the only case.

First timers searching in Downey and Lakewood:   Again faced with multiple offer situations. We are even starting to see where some sellers want buyer to pay appraisal difference or perform any lender required repairs because they aren't paying for squat.  That sure sounds like the language that was being used during the seller's market days, eh?

What was once an easy shot at a standing target for my first time buyers is starting to become not only a moving target in some areas, but a shrinking one! 

Inventory levels for some first time home buyers are shrinking and one can only guess the reasons why behind the diminishing numbers:

  • Fewer FHA Ready homes causing first time home buyers using one of the most popular  first time home buyer programs in Los Angeles to shun the fixer homes that will require extensive lender required repairs prior to close 
  • Non-short sale homes for first-time buyers that can't wait (buyers facing lease renewals, growing family timeframes, relocation).
  • Homes being withdrawn off market by sellers looking for that "Zestimate" price, thus opting to rent/lease out their home when they aren't getting any bites. 
  • Heavy buying competition as the largest pool of buyers are usually in the $450K price and below.  The law of supply and demand kicks in as homes that once sat for 180 days now appear to be going within 30-55 days as turnkey sellers can afford to wait to get several stacks of offers in before choosing highest and best

Again, only guesses.  I had all three sets of buyers say with different levels of exasperation in their tones these passed few weeks, "But I heard it was a buyer's market!My standard answer that almost always applies:  "The person who said it wasn't buying in your market or desired area." 

I have yet to have an unsatisfied buyer so although finding a home can and does happen quickly for some, it may take a little while longer for others, but it will be oh so worth the wait!  Hang in there!

_______________

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Andi Grant Rea Estate aGent Realtor

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Ambassador
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Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Wow...well, looks like there's issues everywhere lol :)!  Can't win for losing depending on the area, the buyer or the seller.  Lots of luck as I am sure, eventually, it will work out for all of your buyers.  Perhaps the first one should go resubmit the first offer :)!

Feb 10, 2012 08:05 PM #1
Rainmaker
209,779
Andi Grant
310-508-4354 | FirstTimeHomeBuyerRealEstate.com - Long Beach, CA
First Time Home Buyers Los Angeles, Long Beach

Hi Brenda!  The first one went pending last week - so much for that one!  I'm sure we will find something. For the most part my (other) buyers have been very reasonable and are a dream to have! 

Feb 10, 2012 08:15 PM #2
Rainmaker
879,834
Lottie Kendall
Today | Sotheby's International Realty - San Carlos, CA
Serving San Mateo County and San Francisco

Hi Andi -- similar up our way in San Mateo County. I have a number of buyers in various price ranges--we're waiting and waiting for more inventory.

Feb 10, 2012 09:19 PM #3
Rainmaker
159,464
Tony Morganti
RE/MAX Crossroads in Cuyahoga Falls and Stow, Ohio - Cuyahoga Falls, OH
CRS, ABR - Cuyahoga Falls, Stow

Andi - What a very informative post.  I believe this trend will be spreading throughout the year.  I have seen our inventory in Northeast Ohio shrinking and the sale price to list price is becoming very consistent at 95%.  It's time for buyers to act.

Feb 11, 2012 12:30 AM #4
Ambassador
900,209
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Andi, I can't say it is a sellers market here, but more homes went under deposit yeterday than I have seen in a long time. With a shrinking inventory it may help things out.

Feb 11, 2012 04:55 AM #5
Ambassador
1,100,560
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Great analogy. I guess that since the market has decreased in some areas, the inventory has also decreased.

Feb 11, 2012 09:56 AM #6
Rainmaker
209,779
Andi Grant
310-508-4354 | FirstTimeHomeBuyerRealEstate.com - Long Beach, CA
First Time Home Buyers Los Angeles, Long Beach

Lottie, you aren't the only other peson in CA who has said they are waiting for more inventory.  I think CA is sitll one of the most desirable states to live in.  

Tony - a big sign that times are achanging.

Andrea - I am working with buyers more these days so this trend doesn't bode well for us. I thik I will have to jumpstaart my listings side again and create a balance.  I want to be on the hot side of the market at all times.

Melissa - yep!  It would appear so.

Feb 11, 2012 06:39 PM #7
Rainer
245,118
Shannon Coe
Allison James Estates and Homes - Loomis, CA
916-741-1664, Lincoln, Rocklin, Loomis, Roseville

Yes, what people are saying and what reality is sometimes you need an agent to give you the current information.

Feb 19, 2012 09:54 AM #8
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