Went looking for a house in LA this past week and sellers are starting to panic. Two years ago when I started looking it was the buyers were in a panic. You were told to make an offer within a day of seeing a house, and to send a letter to the owner about how privileged you would be if they would sell you their home. Of course you should offer 10% more than the asking price–you don’t want to be rude!
When we looked last week three of the eight houses were “flips” by real estate brokers. That is, houses they bought, remodeled and were no reselling. Those three “flips” were on the market for 30-120 days and had all been recently reduced 10-15% from their original asking price. Within 10 minutes of walking in each of the brokers said they had room to work, and that they could make changes to the home (i.e. we could put a room here or a pool–whatever you want).
The most telling part for me was that the brokers themselves are looking to get out. They want out so bad that they are willing to reduce the price by 10-15% not once, but twice, over ~60 days. Of course, after three years of 20% increases in Los Angeles a 20-30% discount bring you back to 2005–which I guess will be known as the peak.
Also, there was very little traffic at the open houses we drove by this weekend.
Anyone else looking for a home right now? What are you seeing?