The real estate bidding war has become a hot topic in the Los Angeles marketplace. Sales prices are rising and bidding wars are breaking out, all due to low inventory. I have recently personally experienced several multiple offer situations on my listings in the Encino and Tarzana areas.
Bloomberg News recently reported on the current predicament of the marketplace, and interviewed Rodeo Realty President, Syd Leibovitch, who explained the situation. According to Leibovitch, it all really all comes down to deals being held back in part by a shortage of willing sellers.
Bloomberg noted that about 2.37 million existing homes were listed for sale nationwide in March, the fewest for the month since 2005, the year U.S. home sales reached a record 7.08 million. A total of 19,284 houses and condominiums sold in Los Angeles and five other Southern California counties in April. Another reason for this increase in demand is partly driven by investors looking to make a profit, as more and more investors are turning to the real estate market for potential growth opportunities to buy homes and flip them for more profit.
According to Bloomberg reports, multiple offers in the Los Angeles area—as many as a dozen per home—have reduced listing times for the highest-priced houses as bidders worried about losing out act faster than they have in the past two years. Unlike old times, when buyers could look at homes and return six months later to find the same home still on the market, today homes are being listed and closing in sometimes as little as 30-60 days. Most of these buyers today are presenting all-cash offers outbidding each other keeping the market competition fierce. These are all great signs that the market is indeed rebounding.