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 Altos, California 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!
- 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!
Shrinking target by viZZZual
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