Inventory vs. Sales Activity

Inventory continues it’s downward trend.  At just 78 homes on the market for sale, we are seeing the lowest inventory in 15 months and considerably lower than inventory levels of last year.  Sales have also dropped significantly starting in August.

There are two reasons for this- One, our housing market is strongly influenced by the school calendar and, two, the “super jumbo” financing limits dropped recently from $729,000 to $625,000.  Buyers for an entry level home today either have to come up with more down payment or pay higher interest rates.

The number of homes entering escrow has also dropped significantly- only 4 homes went under contract in September and just 17 in October.   New listings take a dive and 30 days later the number of new sales also take a dive.  New listings go up and 30 days later the number of new sales also goes up.

Lesson- Do not assume your home will sell because there are no other homes on the market in your price range.  The buyers will wait for new listings rather than make an offer on old or stale listings.

The fall off on new sales means potential for a softening in prices in the first quarter of 2012 because prices are often influenced by our…

Months Supply of Inventory (MSI)

Again, the school schedule seems to rule everything and June and July saw a lot of homes closing escrow- sucking up all of the available inventory and bringing our MSI down.  Since then, however, our MSI has been on the rise. We are now at six months inventory which is close to a Buyer’s market where prices would trend down.

Where are prices now?

Average price per square foot is a good measurement of price trends because it evens out factors such as size and price range.   It is unclear if prices are really doing much of anything, right now.  Our average price per square foot is about 8% lower than this time last year- this is actually quite stable.

But, remember- it looks like our inventory is about to rise due to a softening in sales.  This will have a downward pressure on price. In addition there is….

The Shadow Inventory

Longtime readers know I sound the alarm bells on shadow inventory every few months.  The term refers to the number of homes that are in distress but not yet available for sale to new owners.

You would think that an affluent area like La Cañada Flintridge would not be affected by Shadow Inventory, but you would be wrong.  In fact, the number of homes in the Shadow Inventory is abuot 2/3 of our total inventory for sale.  Said another way, when these homes finally hit the market inventory could increase by 60%.

Any guesses on what that would do to our prices?

And **POOF** just like that, it’s the weekend once again.  It is time for the Open House Guide for Glendale, La Cañada and La Crescenta.  There are not a lot of homes being held open- since this is the weekend before Thanksgiving you’d think everyone would want to be open!  The weather should be outstanding and the buyers are in a buyin’ mood.  Alack, and alas, I am currently out of inventory myself or I would surely be at a home to greet you.

If you’re looking for value in La Cañada,  Indiana is your clear choice. The front courtyard is nestled between garage and house for an intimate and completely serene experience.  Perhaps you want a Northwest Glendale Character Home- I would hustle over to 1420 Sycamore, just above Bel Aire. This is a sweet home that just exudes love. Finally, I am in love with this private retreat in Glendale, deep in the Chevy Chase Canyon.  There are two homes on the lot and each one is sited to give maximum privacy and views.

Enjoy the weekend Duckin’s!  I shall be hiking and doing good amongst the community. What have you planned?

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As I look at the charts of our performance in La Canada real estate I am struck by how much of our market is driven by the school schedule. Sellers and buyers jump into the market right at the first of the year. Our savvy population understands that completing the move from house “A” to house “B” can take a few months, and it is mission critical to be in and settled by August.

This year the predictable spring rise in inventory stopped early and suddenly at the end of May- typically this rise lasts until end of July.

Home sales rose steadily until August and then fell sharply once school registration was over. The most disturbing number, though, is the sharp decline in new contracts in September. Only 6 homes entered escrow for the entire month. This will negatively impact the number of closed escrows 60 days from now.

Our Months Supply of inventory has been rising since July and we are now at 5.1- solid Neutral Market. Average price per square foot reflects this with a flat trend line since May.

Under 1 Million

This category did not even exist in La Canada 5 years ago, and now represents about 25% of the market. Inventory did NOT rise this spring has been falling steadily, all year. At the same time, sales have been steady resulting in the months supply of inventory that has fallen into solid Seller Market. Price trends are nearly impossible to comment on, however, because the average of just a few sales is meaningless.

1 Million – 2 Million

This is our “Bread and Butter” price range, with 42% of the homes currently listed as well as a majority of the sales falling in this category. Because this is the majority of the market, trends predictably follow the overall La Canada market. Inventory rose until the end of spring; sales rose until the end of summer. In September, we saw a bump up in inventory and a sharp decline in closed escrows, landing us at 5.5 Months Supply of Inventory- a strong Neutral Market. Average price per square foot, however, has been bouncing all over the place with 7% decline from one year ago.

2 Million and Above

Our upper end represents nearly 30% of our inventory, but only a small percentage of the sales. The good news is this dynamic is reflected through out Southern California. Even marquee areas like Newport and Beverly HIlls have an over supply of high end homes.

La Canada represents a tremendous value over these marquee areas and with our world class schools, stunning natural beauty and close proximity to several major business centers.

A few of these trophy homes have sold each month and the rate has been quite steady.

It is time to examine our numbers for August 2011. Are home values in La Cañada up or down?  Is this a good time to buy?  To sell?  Without further ado, let’s dive into the numbers.

How are sales?

Our number of homes for sale is down, and has been going down, for 3 months.  This is a normal trend as we are a school schedule driven town and everyone pushes to sell before the school year starts.  However, we are down over 20% from this time last year.

The number of homes sold and closed is also down from last month, but we have sold more homes than this time last year.

I think the most interesting trend is the steady rise of homes entering escrow.  You would think this is due to low end short sales, but, no!  The bulk of these new sales comes from the mid range, one to two million dollar listings.

And prices?

Prices are another interesting story. Median price spiked in March as proactive parents moved early, and then started a gentle downward march for the rest of the year.  However, I participated in a bunch of multiple offer battles during those months- I can assure you my buyers were NOT feeling like prices were declining!  A more accurate picture of price is the average price per square foot, as this number tends to smooth out the differences in house size and price range. This chart shows a nearly flat trend line over 15 months with predictable fluctuations based on season.

So, where are we going?

Let’s look at the Months Supply of Inventory (MSI).  As a review,the MSI is a nice snap shot of the pace of sales.  It shows that if no new homes come on the market it would take (x) number of months to sell our current inventory at our current rate of sales.  If the MSI is 0-4 months, it is considered a seller’s market and prices are probably going up. 4-6 months is a neutral market with prices remaining flat.  Anything over 6 months inventory on hand is a buyer’s market and prices are probably heading down.

Taking a look at the 15 month chart for La Cañada we see a real roller coaster ride, but there are patterns.  The June/July/August pattern of 2010 is repeated in 2011.  If we continue to follow last year, the MSI should stay, solidly, in seller’s market territory for the rest of the year, and prices are likely to at least remain neutral.

Can I bet on that?

Puh-lease.  You know this is only an educated guess.  Anyone tells you they can predict the future is telling you a fib, plain and simple.  Do you need to sell?  Probably not. But, do you really want to move on with your life?

“Now” is one of the best times to sell in recent history.  ”Later” might be better.  It might also be worse.  So, are you the gambling type?

Ok, show of hands, People.  Who is boring, like me, and has no sexy plans to take the weekend in Tahoe or Palm Desert or Malibu?   I thought about jetting down to the South of France for the weekend, but, decided I could knit, just as well, on my couch in the living room watching Dr. Who.  C’est la vie.

SO, for those who are in town this weekend, I present the usual Sunday diversion- the Open House Guide!

Best bets: for a great priced Montecito Park cutie, 3381 Vickers Dr. is a must see.  It is $574,500, it’s super clean and adorable and it belongs to CVHS.  Puh-lease!  Just go see it.   2732 Sleepy Hollow is a very splashy newer built executive home in Glenoaks canyon.  Here’s a little 15 sec video I took on caravan.  As one of tweeps said, “this place is sick!”.  4168 Dover is a treat for the eyes and for the soul.  This La Cañada Mid-Century home is Zen, re-imagined by Jay Johnson.

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The Broker’s caravans were very light this week. I guess everyone is still in “vacay” mode.

I think the deal of the week is this 2 bedroom Spanish Style in the Rossmoyne for only $549,000.  It has a supurb Batchelder picture tile fireplace a veritable orchard in the large backyard.  It is also next door to one of the finest Craftsman homes in the area.

The winner of “prettiest home” is, hands down, this La Canada post and beam style home  in the Flintridge Hills.  Renovated by the noted local builder/designer, Jay Johnson, this is a masterful study in light and tranquility.  Here is a tiny video of the great room area

(p.s. I take 15 sec. videos of all the homes I see on caravan.  Here are the La Cañada Homes and here are the Glendale Homes, in case you want to see more of the homes on caravan)

We're sorry, but we couldn't find MLS # 12155510 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

If I were to be completely honest and authentic with you- and I always am… today’s cavalcade of homes was rather underwhelming.  Perhaps the splashier homes are waiting for everyone to get back from vacation!

Nonetheless there are a few worth mentioning.  First up is the tranquil La Cañada Cottage at 308 Baptiste.  This petite but perfect little jewel is on the other side of Crown- the part where the Oak tree juts out into the street.  The backyard is divine and the bonus space behind the garage is lovely.
Here is my 15 sec video of the backyard:

Another neat house was this sprawling La Crescenta Ranch estate at 2335 El Moreno.  Located just off of Briggs, this looks like one of the original ranch homes in the area.  It has been tastefully remodeled and has a lovely guest suite, pool and extensive grounds.
Here’s a video about the curb appeal:

But the winner for the day is this perfect La Crescenta Fixer on 2914 Franklin.  Located above Foothill Blvd, this is nearly 1500 sf of LOL house (that’s Little Old Lady not laugh out loud, BTW) for only $435,000.

Here’s the inside:

That’s my day on Foothill Caravan!  Remember, you can click any of the links to see details, pictures or schedule an appointment to see any of these homes.  Hit the search button at the top to search for you ideal home!

If you would like to follow me, virtually, on caravan go to Tout on Tuesdays and Wednesdays to be the first to see the best- and worst- homes on the market.

La Crescenta

Let’s start off easy, shall we?  La Crescenta is known as the Balcony of Southern California- not as the bastion of big dwellings.  There is a new development of 5 homes and the most expensive is at 2625 1/2 Prospect Ave.,  listed at $989,900.  The floor plan comments by the agent indicates that these are your basic modern floor plan- heavy on the master suite, bed/bath combo on the first floor.  Very little is said about the finishes, but I think it is safe to assume granite/stainless steel in the kitchen.  If you are into the new home look- this is your best bet.

Next up is the only home in La Crescenta over one million dollars 3048 Markridge is listed at $1,099,000 and has been on the market for 134 days.  It features miles of stone, stainless steel and dark wood cabinetry.  It has a large yard with a sparkling pool. Located high up in the hills it has some great valley views and is close to the Deukmajian Wilderness Park.  I am guessing, however, that the right buyer for this home is an unlikely hiker.

Glendale

The most expensive home in town- at least in terms of the absolute dollar, is (drum roll, please) 2047 Rimcrest Dr., listed for $2,899,000. This ginormous home is 8143 sf of living space (NOT the lot size,people- the house size). The ceilings are high, the floors are sparkling and the view will knock your socks off.

These homes are amazing, but, to my way of thinking, they are not even close to the most expensive listing in town.  That honor goes to 501 Caruso Ave. in the famed Americana at Brand.  This is Urban Concierge style living and it is unlike any other residential choice in the area.  This penthouse unit is listed for $2,050,000 for an efficient 1894 sf of living space.  There is also a HOA fee of $939/mo. This buys you an unparalleled style of luxury living that I can’t begin to describe.

Now, Children, I am the first to admit that this shocks my Cheap Chinese Heart in ways that I can not begin to count.  On the other hand, I would never pay for a first class airline ticket and this is clearly my own problem.   I can’t wait to sell this to someone who is free from my own, idiosyncratic, limitations.

La Cañada Flintridge

While there is no lack of money in La Cañada, we are an unpretentious people, not given to flaunting the successes of our lives.  But,  for every rule, there is the exception.  567 Meadow Grove tells the world, on no uncertain terms, just what sort of people live here.  Listed for $10,700,000, this is a French Chateau whose interior draws from the Versailles and the Louve.   It is rich, sumptuous and just a tiny bit over the top.  If you want a home that says, “I have arrived”, this is your place.

And now this is the drum roll moment, for sure… the most expensive home in all of La Cañada is… 4385 Commonwealth Ave., clocking in at a heart palpitating $12,200,000.  I wish I could list all the ways I love this home.  I love it’s elegance, quality, style and the fact that there is a sound proof studio for a drum set (a drumset!!).  If I were to win a Super Lotto (a regular lotto will not be enough) I would buy this home in a heartbeat.

This home is completely understated and completely perfect. It won’t necessarily wow you with pictures- this is home you must experience.

Which one would you like to buy?

I kid… not really.  Remember, you can click on any of the adresses to see details and pictures.  If you want to buy any one of these homes there is a convenient appointment  button at the bottom of each listing!

So, here’s my question:

If money were no object, which one of these homes would you chose and why?

Today is the Fourth of July- and I have already written the obligatory blog post about where to see fireworks in our fair corner of the world.  Today,  I want to talk about something even more American than fireworks- Homeownership.

Here are the least expensive homes in our area.  They are all single family homes and none of them are short sales.  Without further ado…

Glendale

Unsurprisingly, Glendale had the least expensive homes, by far.  Both of these homes are “South of the Freeway” but they are sweet and cheap!

First up is 817 E. Wilson (click on the link to see property pictures and details).  This bank owned home is a sweet Walton’s Family type Craftsman Bungalow with 2 bed, 1 bath and a small yard.  Listing agent says it needs some work (I’ve seen worse) but at $249,900 I think there’s some room for repair!  Located close to the city Government buildings it is also very close to Trader Joe’s and Chipotle’s.

Next is another $249,900 beauty- 603 S. Louise.  while still a Craftsman, this Bungalow is more Pasadena inflected.  There is a huge brick apartment building looming over the backyard and there is only 1 bedroom- but the kitchen is updated and it looks fairly clean.  This is also a bank owned property.

La Crescenta

Moving up, waaaaaaay up,  is a very cool home at 2845 Los Olivos.  Located ABOVE Foothill, y’all! (This is like being across the tracks, for those who don’t know).  At $324,900 I think this might be the best buy on the market right now.  Three bed, one bath and a remodeled kitchen…. who cares that the backyard is minuscule?

Unfortunately Los Olivos makes the next listing look a little like Jed Clampett moved to La Crescenta- and that’s not nice since 3722 3rd Ave.is a rare standard sale at only $335,000.  There is a certain mountain cabin rustic charm to this simple home.  It looks like there might even be a charming yard- once you hack beyond the over grown jumble.  With 904 sf of living space this is probably the best deal for space.

La Cañada Flintridge

Yes, Dorothy, there are even low priced homes in La Cañada!  Of course, we are still over half a million dollars and next to the freeway, but, DARLING!, this is La Cañada, home of the “so good you can’t touch this” school system!  (I’ve been listening to M.C. Hammer this weekend)

The most inexpensive deal in town, at $519,000,  is 4210 La Tour Way.  This block long street is off Verdugo Rd. opposite Verdugo Memorial Hospital.  The good news is that this clean little post war home is NOT backing to freeway.  No.  It is 2 houses away from where the Glendale and Foothill freeways merge.  However- it IS part of the coveted La Cañada school system, it has one and a half baths, a conventional sized lot and it is neither a short sale nor a bank owned home!  If schools are your thing there is no doubt that this is a best bargain!

Last, but not least, is 4344 La Granada Way, clocking in at $569,000.  La Granada swoops down off of Foothill Blvd. right near the Foothill offramp off the 2 freeway.  Subject home has it’s side to the 2 and 210 freeway with one home in between.  Enough of the bad- here is the good!  This is a standard sale home with lots of move-in ready upgrades like new windows, central AC, copper plumbing and newer roof.  It also feature a huge yard and newer kitchen.

There you have it- the least expensive homes for sale, right now.  Don’t forget, you can click any of the highlighted addresses for pictures and details.  You can also contact me at the bottom of each page if you want to schedule a showing.

How is the residential real estate market in La Canada, Ca? Are prices up? Down? Are we going to “you know where” in a handbasket or is the economy turning around and happy days will soon be here?

If you are a regular reader you will remember that last month we were feeling pretty darn smug about the strength of the La Canada market.  Our prices were up, we had more and better homes to sell, and our buyers had more cash than anyone else.  Nah, Nah, Nah, everybody else.  We were smokin’.

That was so last month.

This month were are singing a slightly different song.  Median prices are down, (about 7.5%)  though we are still doing better than our neighbors in Glendale and La Crescenta.  A little more disturbing, perhaps, is that our average price per square foot is also down, (9.6%) indicating there may be a general, ever so slight, softening of prices.  Ever so slight, I emphasize, because I have to tell you- my buyers have been in a shootin’ match on every house they want to buy.

There are fewer homes selling

I think this is a more important number.  Both the number of homes closing escrow and the homes entering into contract are way down, 43.5% and 36.4%, respectively.

Why is this?

Financing. It is a lot harder to get thee banks to make the loans- at least within the contract time periods.  At our prices- with loans often above one million, financing is harder to accomplish.  Harder, but not impossible.  Hoops must be jumped through, and all manner of stupidity from the banks must be tolerated.  My “boots on the ground” experience says that these homes will close escrow, eventually.  It will take longer.

The funny thing, is, that in most of the shootin’ matches I’ve been involved in, there are one, or more, all cash buyers!   There is a tremendous amont of money floating around our town (no real surprise, there) but the money is looking for a deal.  The deals are getting scarce, so when one pops up, BAM! multiple offers.

And, word to the wise seller, each of these homes was in absolutely move in condition.

Inventory is up

I think the last 3 months of near frenetic activity in La Canada has made some sellers a bit cocky with the prices.  The months supply inventory is up to 4.6 months, far outstripping our neighbor’s amount of inventory.  We are nearly double last month’s supply of inventory.  Remember, 6 months indicates a “normal” market. If you factor in the influence from the shadow market, a 6 months supply would surely spell a very slow market in La Canada.

A word to the wise buyer and seller

Ok, Mr./Ms. Buyer- I understand you think prices are coming down.  I won’t argue the point.  However, where will interest rates be?  Also, La Canada is a pretty small town.  If you are buying for schools (and most of us do) than who is to say the best houses will be available later in the summer?

I think there is a major opportunity to look at homes that are NOT move in ready.  The cash buyers are ignoring these homes, might the seller be more flexible?

Mr. and Mrs Seller- wake up!!!  Things are not getting better and there is reason to believe they will get worse as the summer heats up. Don’t bet your future on a fantasy- the fantasy that you will get a better price if you just tough it out for x number of months.  Things will NOT get better in that time period.

As they say in the Mastercard commercial, “Moving on with your life? Priceless”