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When Will the Los Angeles Real Estate Market Rebound

To properly answer the question about when the real estate market will rebound, you want to first understand the specific market you’re looking at.
For example, Los Angeles sets itself apart from many other parts of the country — even from other parts of Southern California — by being comprised of a host of characters and varying degrees of wealth. Despite the global recession, our part of the world still has quite a bit of money, which makes this real estate market different from any other.
But regardless of which market you’re evaluating, the key metrics to examine are:
the ways that individuals price their homes (if they choose to bring them to market)
how the market receives them
Recently, in an office meeting, I polled the group of 60 talented and seasoned agents here at Partners Trust about the effectiveness of the pricing strategies of the homes that come to market on any given week. The results were astounding: the overwhelming consensus was that 80 to 85 percent of all homes coming to market are overpriced by at least 10 to 15 percent of what they need to be in order to elicit offers from willing buyers.
Here’s the crux of the issue and probably the biggest obstacle to our recovery: most of the homes coming to market have an element of “distress” to them. Sellers that must come to this market are trying to get as much money as possible to alleviate other debts, so they overprice their homes hoping for the best. The problem is that buyers know fair market value because they see everything that comes to market and have the vast online resources to gauge true value. They know what they will pay, and it is certainly not the price being offered most of the time, which causes our current stalemate.
Furthering this gridlock and buyer frustration is when sellers who don’t need to sell would rather wait for the market to regain steam prior to entering the fray, leaving some of the more perceived attractive homes — based on location and amenities — off the market.

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