A shortage of houses for sale in the San Fernando Valley is triggering bidding wars, quick sales and an investor feeding frenzy, according to real estate agents.
With prices low after the market crash, more homeowners are reluctant to sell – and with banks still stinging from the foreclosure crisis, financing is harder to come by.
At the same time, the lower prices and rates are luring more buyers into the market. The result: Not nearly enough homes are on the market to satisfy the demands of a growing pool of homebuyers and investors, driving prices back up and limiting selection.
After 37 years as an agent, Carol Wolfe with Rodeo Realty in Encino, can’t recall seeing a market like this.
She’s personally trying to buy a 1,126-square-foot three bedroom, one bath fixer upper in Lake Balboa listed for $245,000 to either flip or rent out.
The seller has 34 offers and on Tuesday instructed all the bidders to submit their last, best offers.
“All of the offers are cash. There are so many investors out there that it’s crazy,” she said. “I put my offer in at $310,000 and I probably won’t get it.”
A few weeks ago she had a listing in the 4400 block of Azalia Drive in Tarzana priced under the market at $599,000 and held a broker’s open house – used to introduce other agents to the property – on a Friday morning. More than 200 people showed up and the property attracted multiple offers. It’s now in escrow for $715,000, she
said.
“That was crazy. The buyers will bid up the price if you price it right,” she said.
That’s the market’s up side. The flip side is that listings are hard to come by.
Wolfe is used to handling between 10 and 20 listings at a time. She currently has two because of the tight inventory.
At the end of March there were just 1,875 houses and condos for sale in the San Fernando Valley, according to the Van Nuys-based Southland Regional Association of Realtors, a scant 2.8 month supply at the current sales pace.
That’s the lowest since the start of the downturn in 2007.
Inventory peaked at 7,730 properties in October 2007 and has been steadily falling since then.
The record high inventory is 14,976 properties in July 1992 as the Valley’s aerospace sector was shrinking and the record low is 1,492 March 2004 as the market was hot and credit easy. The Realtors group started tracking the combined house and condo inventory in January 1986.
Jim Link, the Realtors association CEO, said inventory probably got a little tighter in April, but buyers are also still reluctant to jump in to the higher end of the market.
“Buyers are still being very picky, and they won’t overpay. They still feel it’s a buyer’s market,” he said.
And even if a property has multiple offers, the winning bid might not be justified by the property appraisal and the deal falls through, Realtors note.
Low prices and interest rates have finally drawn William and Nikki Maxwell of North Hills into the market. On Tuesday they started looking in Chatsworth to be closer to their children’s school, Our Community Charter, which moved to the community two years ago. Their price range is between $300,000 and $600,000 and they were surprised to find a stunning home in the 10400 block of Oso Avenue within their budget.
But there is a problem. It might not be on the market when they are finally ready to buy.
There are just 70 single-family homes currently on the market now in Chatsworth, notes Glendale-based Realtor Susan Featherly, a member of the Re/Max Town Center.
“That’s a 2.1 month supply of homes, which is really below average,” she said. “There are buyers out there who can’t find what they want.”
That got Bill Maxwell’s attention.
“It feels like it will be a considerable challenge,” said Maxwell, a novelist who also writes and designs computer games. “I guess in this case starting with ignorance is bliss because I won’t stress myself out.”
He plans some heavy networking with parents who already moved to the area and community groups.
And it does feel like a buyer’s market to the Maxwells.
The house, with a huge backyard and swimming pool, is listed at $574,000, which the Maxwells think is a bargain.
“This house would have been a lot more five years ago. The fact that it’s not $900,000 is amazing,” Nikki Maxwell said.
Featherly and homeowner Brenda Kalosh, a retired assistant director in the TV industry, said the house is priced right and has already received one offer after a “twilight open house” held over the weekend for neighbors.
Twenty brokers and four other families toured the property in a two-hour period Tuesday during the broker’s open house, Featherly said. And four brokers said they would submit offers today.
Kalosh isn’t happy she’ll probably sell the house – which she bought 19 years ago for $325,000 – for less than she thinks it’s worth.
But she’s retired and has bought a house on Lake Nacimiento in Paso Robles.
“It was great,” she said of living in the house. “I got the house of my dreams thanks to the Northridge Earthquake. I had earthquake insurance and put (all the damage payouts) back into the house.”
greg.wilcox@dailynews.com
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