Happy New Year! It’s that time again to track and analyze the prevailing trends in the Beverlywood and Adjacent area of West LA (Area #9 in the MLS) single family residential real estate market. (All data used for analysis is supplied by the Beverly Hills/Greater Los Angeles Area Multiple Listing Service and is deemed accurate).
Number of Single Family Homes Sold in 2014: 208 compared to 190 in 2013 10% Increase
Avg. Price of Single Family Home Sold in 2014: $1,059,000 compared to $ 946,000 11% Increase
Median Sold Price in 2014: $892,500 compared to $799,500 in 2013 11% Increase
Avg. Price Per Square Foot of Living Space in 2014: $574 compared to $498 15% Increase
Avg. Days On Market in 2014: 55 days (includes escrow) compared to 61 days 10% Decrease
Avg. Sold Price / Avg. List Price: Sellers received 99.37% compared to 99.60% NO CHANGE
“Days on Market”: how long to go under contract and close in 2014 took 55 days which was 6 days shorter than the 61 day average in 2013 and 72 days in 2012. The reason for the decrease can be attributed to the very low inventory which causes buyers to decide even more quickly than in prior years. All cash transactions typically go faster than sales that involve banks and loans that may be a factor as well. Remember this is the average from over 200 neighborhood sales.
“Price Per Square Foot”: dollar value on each square foot of “Living Space”. Divide sale price by square footage. In 2014 the average was $574.36 per square foot which is a 15% increase when compared to 2013’s average of $498.15. Homes currently for sale in January, the average price per square foot is $600.98, the upward trend continues.
“Average Price”: total sales volume divided by the number sold. 11% increase from $ $946,000 in 2013 to $1,059,000 . Also of note is the average Sold Price percentage when compared to the seller’s asking price. Example: a home for sale for $1,500,000 sells for $1,500,000 the seller received 100% of their price. In 2014, on average sellers received 99.37% of their asking price compared to 99.62% in 2013 but only 96.32% in 2011. Lack of supply fuels demand so buyers pay the list or above list price in order to be the successful bidder.
What’s in store for 2015? Read any newspaper or blog and there’s tons of positive news on the US economy. The home prices in the area are now at or above the levels we saw prior to turmoil of 2008. As we learned from the last cycle, it is unrealistic to expect this pace of appreciation to continue. The Federal Reserve Bank is signaling to the markets that interest rates will rise in 2015. What will higher interest rates do? Negatively impact the purchasing power of buyers and limit how much they can pay for your home. Based on these indicators, there is a reasonably strong likelihood that in the near term, the 2015 real estate market may be the best for owners hoping to sell at the peak.