New data shows California homes are more likely to sell quickly when priced lower from the start, even as buyers often bid above asking. The trend reflects affordability pressures across Los Angeles and other regions, where many Latino families remain priced out.
Perhaps California homeowners are getting the message that it will take price cuts to move their properties.
A recent report looked at a Zillow report tracking homes that went into escrow in February and how long they had been on the market in the 50 major U.S. metropolitan areas – including six from California.
With statewide homebuying languishing near Great Recession lows, aggressive asking prices seem to spur certain California homes to sell quickly.
Looking at the median results from the six California metros, the figures show that 18% of sales contracts were signed within seven days of the home hitting the market.
So what’s the secret sauce for speedy results?
Well, buyers in 61% of these quick sales paid above the asking price, compared with 32% of all buyers.
In most cases, the motivation for fast action is the seller’s deeply discounted initial pricing. That asking price “bargain” likely spurred house hunters to act quickly on this “affordably” priced housing – and pay up aggressively.
Discounting seems like a smart tactic as the homebuying slump enters its fourth year. Contemplate what a report on February’s closed transactions found.
Attom says it was California’s third-slowest-selling February since 2005. Meanwhile, the statewide median price has fallen year-over-year for three consecutive months.
So, price cuts seem required to move many properties.
And it’s not just California. Zillow found that 19% of U.S. listings sold within seven days, with 44% selling above asking price, compared with 17% of all homes.
Among the six California meters, where were the swift sales most likely to occur? Here is how they ranked:
– Sacramento: 25% sold in seven days, No. 17 of the 50 meters – with 63% selling above asking price vs. 30% of all homes.
– San Jose: 22% sold in seven days, No. 20 nationally – with 84% selling above asking price vs. 61% of all homes.
– San Diego: 19% sold in seven days, No. 28 nationally – with 59% selling above asking price vs. 32% of all homes.
– San Francisco: 18% sold in seven days, No. 29 nationally – with 80% selling above asking price vs. 55% of all homes.
– Los Angeles and Orange counties: 14% sold in seven days, No. 35 nationally – with 56% selling above asking price vs. 32% of all homes.
– Inland Empire: 12% sold in seven days, No. 39 nationally – with 49% selling above asking price vs. 24% of all homes.
