Short Sales, strategic and otherwise, would seem to be the name of the game this year in L.A. County as in much of the rest of the country. With some 25% of the population now “debt-impaired” and 3 million foreclosures already accomplished, short sales are beginning to seem like business as usual.
Just wondering how the more pricey areas of L.A. County were handling the situation, I took a little tour on the MLS. Here’s what I found:
- Malibu has one active listing of $4.5 million and 12 active short sales priced from 389000 to $3.8 mill; 6 pending short sales, but no other pending sales. One short sale closed in the last 3 months, but no standard sales.
- Pacific Palisades has one active listing and 8 active short sale listings ranging up to $2.5 mill; one pending short sale , but no standard pending sales.Four short sales closed in the past 3 months and one standard sale at $3.75 mill.
- Santa Monica has 19 active short sale listings and 14 standard, but 16 pending short sales and only 8 standards with 8 short sales closed in the past 3 months as opposed to 2 standard sales.
- Beverly Hills shows 7 active short sale listings maxing out at $3.5 mill with 10 pending short sales up to $2.7 mill and no standard sales. In the past three months one short sale has closed, no standard sales.
- Bel-Air has 2 active short sale listings, 7 pending short sales [up to $4.1 mill] and no sales in the past 3 months.
- Brentwood, a larger city, has 217 active listings, 9 short sale listings, with 7 pending short sales, but in the past three months only one sale–a short sale, of course, for $2.9 mill.
- Arcadia in the San Gabriel Valley shows 148 standard listings with 5 active short sales, 12 pending short sales out of 39 pending sales and in the past three months 68 closed sales with 7 short sales.
What are we to make of this? I see a number of different strands.
One, standard sellers who do not lower their prices to short sale levels don’t sell their houses, so if you have to sell your home, it’s better to bite the bullet and price it right. If you don’t have to sell, take it off the market.
Two, in areas like Arcadia where many homeowners purchased their homes all cash or have paid off their mortgages, the crisis is less severe. If you want to live there, you will most likely do a standard sale.
Two, the short sale, strategic or otherwise, has certainly hit affluent areas.Any notion we may have had that expensive homes are somehow immune to our ongoing financial crisis must surely be seen as wrongheaded. Owners of expensive homes, mansions, are also sacrificing. Short of calling up all these sellers or their agents, I can’t know if the sales are strategic or the result of genuine hardship. What I do know is that the rich are now as “debt-impaired” as the rest of us.