Prices for Palos Verdes real estate have not been fluctuating as much as other areas. However, when one looks at the average price for single family residences at the end of March 2009 (1,259,000) compared to March 2008 ($1,608,000) there is a 27% decrease but what those numbers do not show is that the number of sales under $1,000,000 are currently the bulk of sales (40 out of total sales of 82 since 1/1/09) which lowers the average price as the number of high end sales is at historic lows. Since the first of the year, out of 82 sales, only 8 were over $2,000,000; that’s 8% of sales. In 2008, 16% of sales were over $2,000,000. The difficulty in getting jumbo loans is definitely affecting that segment of the market. As a point of reference, in 2008 sales under $1,000,000 were only 25% of total sales.
What this means to buyers is that they will not be getting a huge discount when buying property on the Peninsula. We certainly have had a decrease in market price but no where near the numbers that are indicated when one looks strictly at average price. This was discussed in a lengthly article in the Los Angeles Times entitled, “Not that cheap”. The chart above shows how the increased sales in the under $300,000 market have skewed the median price in Los Angeles County. There were several stories about disappointed buyers losing out in multiple offer situations. There was even a story about a “frustrated” couple who made an offer for $1,000,000 on a home that was listed for $1,700,000 and the seller said no thanks.
The media has been giving buyers straight sales statistics without explanation for months and now that buyers are back in the market with great low interest rates loans, they are surprised to find sellers who are not willing to severely discount the price on their homes. It’s best to look at the recent sales comparables for the particular area of your interest, keeping in mind location and condition of the home.
