For much of 2013, the Los Angeles luxury real estate market has been characterized by intense competition. Multiple offers have helped to push prices higher for Los Angeles luxury homes, and according to a recent report by the California Association of Realtors (CAR), 2013 saw an increase in the number of homes that were sold for more than their asking price.
In the “2013 Annual Housing Market Survey,” CAR found that approximately 49.5 percent of sold homes changed hands for more than they were originally advertised at, nearly double the number from 2012. And homes that sold for more than their asking price saw a 4.8 percent increase in the median premium paid.
C.A.R. President Don Faught said: “Sellers are more upbeat about the housing market and are more comfortable with their financial situation. As the real estate industry and the economy continue to recover, many sellers regained confidence in owning a home since the Great Recession. The number of home sellers planning on repurchasing, in fact, increased to the highest level since 2007, which suggests that repeat buyers could be the driving force in the housing market in 2014.”
Around the country and specifically here in Los Angeles, the public has finally become comfortable with the housing recovery. Nearly half of home sellers said they planned to purchase another home in the future, an improvement from the height of the recession when many foresaw themselves getting out of the real estate game completely.
Inventory Issues Drive Prices Up
Inventory issues have been a driving force for much of 2013 with many markets seeing increased buyer interest and a lack of available homes to keep up with demand. Intense competition forced many buyers to bid against others, and more than 70 percent of homes for sale this year received multiple offers. That marks a 57 percent increase from the previous year, and is the highest figure over the past 15 years. On average, homes received 5.7 offers, up from 4.2 the previous year and 3.5 in 2011.
What’s more, the distressed market, meaning those homes in foreclosure, dominated all other segments as investors looked for properties they could fix-up and either turn into rentals or flip for a profit. Real estate-owned (REOs) properties also garnered multiple offers and saw a 71 percent increase from 2012. In fact, investor interest in the California real estate market accounted for 19 percent of total sales here.
Cash buyers were also prominent in the Los Angeles luxury real estate game, with more than 25 percent of all home sales occurring with cash during 2013. And in California specifically, international buyers showed their favor for the Golden State’s real estate market. For the third year in a row, the number of overseas buyers increased, and about 57 percent of international buyers, mainly from China, Mexico and Canada, purchased a property to live in full-time.
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Homes in Los Angeles, California between $3,000,000 and $4,500,000
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(all data current as of 10/22/2017)
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