Jobs and wages are on the rise. Buyers are newly urgent, fearful an era of cheap money is ending. And to top it off, there simply aren’t enough homes listed for sale. As a result, bidding wars are common and prices are rising during the popular spring buying season. A report out Tuesday from CoreLogic shows the Southern California median home price jumped 7.1% in March from a year earlier, hitting $480,000 in the six-county area. And despite low inventory, sales rose 7.8%.
A pitched battle
When Elizabeth Rodriguez and her husband realized that the market was white-hot in the Northeast L.A. burbs where they wanted to raise their three children, they devised a strategy.
The couple, who moved from the Bay Area for Rodriguez’s husband’s director job, began writing a “love letter” to sellers describing how much they wanted the house. And then they bid over asking — way, way over asking.
In one case, they offered $102,000 above the $798,000 list price for a three-bedroom Spanish-style home in Mount Washington. The house sold to someone else for $985,000.
“After that I was like, this is insane,” said the 35-year-old mother of three.
The couple bid on 11 homes, she said, before they finally purchased a three-bedroom in the hills of Glassell Park listed at $799,900. To seal the deal, they again bid about $100,000 over asking, this time before an open house was held.
“It was a crazy process,” Rodriguez said. “I’m glad we are on the other side of it.”
For developers, crazy times are good — especially in areas where few new homes are being built.
Last weekend, builder Planet Home Living held a grand opening for a Silver Lake 10-home subdivision built on small lots. Before any prospective buyers showed up, six of the $1-million houses were already in escrow after the Newport Beach firm contacted people who signed a list of interested buyers.
“Four hundred people on an interest list, that’s a lot for 10 homes,” said the company’s chief executive, Michael Marini. “Anything in L.A. that we build, it sells out immediately.”
The buying frenzy isn’t limited to Los Angeles either.
Agents across the region reported heavy demand, even in the Inland Empire, which since the housing bust has recovered more slowly than areas near the coast.
Chino Hills agent Derek Oie said he and others are taking advantage by marketing open houses as a one-time-only event, in a bid to create even more of an auction atmosphere.
At one house in Eastvale he brought a client to earlier this year, 100 people showed up.
“We showed up and literally cars were parked up and down the whole cul-de-sac,” he said.