The Long Beach real estate market is said to be a "buyers market". Now since I do represent buyers this does make me happy, but not every neighborhood is truly a buyers market. For a buyers market to truly exist you need the following conditions:
- Abundant Supply - This would generally be categorized as over a 6 month supply of homes available. This means if no homes were listed it would take over 6 months for buyers to purchase the homes listed until there would be 0 properties available.
- Motivated Sellers - If sellers have time on their hands then they don't necessarily offer the discounts or price reductions that would truly make a buyer happy.
- Active Buyers - People have to want to want to purchase, whether it be for relocation, moving up or whatever, we need buyers to take action.
With these conditions in mind, let's look at a few neighborhoods here in Long Beach that might not be a buyer's market. Now it doesn't mean we can't find deals in these neighborhoods, but it does bear in mind that we probably won't "steal a home". Here are some of the areas in Long Beach that are holding strong and why.
- Park Estates - This neighborhood is located just west of Cal State Long Beach. It traditionally has very limited inventory and the homes have a very low turnover rate. With a low supply it isn't a strong buyer's neighborhood, but now may be your best chance to find a deal as there are 7 homes available under $1,000,000 which is a rarity. You will get the best deals here if you are willing to do some upgrading.
- La Marina Estates - This area is hard to find on a map, but locals to Long Beach know it well as one of the most desired areas to live. Located east of Cal State Long Beach this small tract of mainly custom homes has extremely low turnover. As of May 23rd, there are just 3 homes available in the neighborhood with the most affordable being $825,000.
Take a careful eye on the neighborhoods and what levels of supply are out there. Not everyone may be a buyer's market, but finding the right neighborhood shouldn't be difficult. Use the Long Beach MLS or contact us directly and we would be happy to learn more about what is most important to you.
2 comments:
Park Estate is a beautiful area and very well maintained. There are 17 active SFR in the area. At the top is an 8.4M listing which is nice but seems far from any reality that is possible for the LBC and is not considered in any current metrics stated below. There has been little activity for the last several months on either side of the table. It looks like a huge waiting game on both sides. After looking at historical sales data for Park Estates, its largest year over year increase of 18.7% was in 2004-2005. At that time average prices were just below 900K. Most economists believe the market has to contract to at least this point before any “recovery”/settling is seen. Current price per square foot measurements are at $472/sq. ft.. This metric will have to come in-line before buyers start acting.
Park Estate has yet to go the route of the Virginia Country Club/Bixby/Cal Height areas where there have been sizable price corrections and concessions made by sellers. It will be interesting to see if and when seller’s psychology changes in Park Estates. As always though, a good house that is PRICED WELL (relative to its current market) will always sell but year-over-year price reductions will be in our future till at least the end of 08’ or the first quarter of 09’.
That El Jardin house in La Marina Estate that is pictured is a very nice house in good condition, with a great layout, it is in a nice location on the street, and is on a huge lot but it has been on the market almost 3 months with only one 50K price drop. It has not sold because it is price way to high for the area (La Marina Estates is not Park Estates). Looking at the public records for the place, it was last purchased for 925K in 6/2006 which indicates they are probably in financial rough waters given a sales time of less then 2 years, if they keep it at this price they just might make the two year mark. The owner said they where looking to buy in Bixby/VCC area to bring down their costs but it looks like they may need to bring down there asking price first.
Thank you for the great feedback. I would certainly agree that Park Estates has not gone the route of Virginia Country Club yet. I think it has a a couple of main differences that have enabled them to hold on to stronger prices. 1. Fewer homes have been made available for less than 1 million 2. Location of Park Estates is generally more desirable.
Regarding the available home, it is in certainly condition. With low inventory in La Marina Estates they might get their price (although I agree it certainly will take a bit) because their price will cause people to compare them to a few other prime areas as well.
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