LA VERNE, California, October 31, 2017 — As a Realtor, I track price reductions and lately there have been a lot of them.
The price reductions aren’t limited to any area of town or any price range. A high-priced home is just as likely to see a price drop as a mid-priced home.
Of the 37 single-family homes currently listed in La Verne, there have been 17 price reductions.
In the frothy days of just a few months ago, you rarely saw any “Just Reduced” signs.
Recent data from Trulia, however, reinforces this downward pressure on prices. Currently, Trulia lists the median price of a La Verne home at $591,000. That’s 2.2 percent better than a year ago, but a 3.6 percent decrease from three months ago.
What’s behind this trend?
There’s no one answer, but typically, the market starts to slow at this time of year. And the longer properties sit on the market, prices tend to fall.
I also believe that the market was getting ahead of itself. There had been unremitting news over the spring that there was so little inventory that when a house did hit the market, bidding wars would break out.
And with mortgage rates still at historically low rates, would-be buyers were emboldened and encouraged to make strong, if not over-the-top, offers if they didn’t want to miss out on another house.
Accordingly, houses were priced aggressively, and, for a time, sellers got their number or even more. Houses were selling so quickly, in fact, that some sellers weren’t even bothering to fix them up for sale, and you could hardly blame them for not wanting to go to any extra expense. That, by the way, was another tipping point that prices were finally peaking.
Whatever the reason for the recent dip, the downward trend in prices has snapped the market back to reality. Smart sellers, who don’t want to see their home languish on the market are again making minor interior renovations and improving their home’s curb appeal to help their home stand out from the competition.
Asking prices also have become more realistic, relatively speaking.
Interestingly, many new “just reduced” homes are now showing prices below their Zillow or Trulia estimates — and for a long time, you never saw that.
This slight rebalancing or re-adjustment in the market is, of course, great news for buyers. A $25,000 reduction on a $500,000 home or a $50,000 on a million dollar home may be a modest 5 percent reduction, and while not like a half-off sale at Macy’s, the reduced prices are something we haven’t seen in the market for a while.
So, if you’re a buyer thinking about your first home, you have some leverage you didn’t have six months or even three months ago.
To take advantage of this pause or slight market correction, make sure you have a pre-approval in hand from your mortgage lender so the seller will take you seriously.
With almost half of the homes coming down in price recently, this might be the ideal time find a great home you both love and can afford.
If you have any questions about buying, selling or investing in real estate, please call me at 626-344-0907.
Colleen Bennett is a longtime La Verne Realtor, DRE#01013172, with Sotheby’s International Realty.