Saturday, May 26 , 2018, 1:43 pm | Fair 67º


Laurel Abbott: Dynamic Housing Market Sparks Bidding Wars

As spring begins, we find ourselves in a very dynamic housing market. There are multiple offers on everything from manufactured homes, fixers at a half-million dollars as well as multimillion-dollar estates.

In fact, 25 percent of the homes that closed last month sold at an average of 7 percent over the asking price. These numbers are remarkable since they encompass the whole market from Carpinteria to Goleta.

For buyers under $1 million, the numbers are even more staggering, but difficult to tease out statistics. Anecdotally, we are having multiple offers that are sending properties over the asking price, and virtually every house coming on the market between $400,000 to $700,000 has multiple bidders. Of the 60 home sales in this sector between Jan. 15 and March 15, 38 were at or over asking, and they were as much as $10,000 to $100,000 over the asking price.

Some of these dramatic overbids were the result of banks not recognizing the increases in this sector and relying on comparable sales from up to six months ago, which has created inappropriate pricing.

Some agents recognize that with the lack of inventory, they should rely on the recent comps, knowing that there is no way to “underprice” a property since the demand is so high. Buyers will “correct” the pricing to current market value.

There is some concern that this is unsustainable and that another “bubble” is looming. In light of the difficulties of the past three years, the number of sales and equity building is very encouraging, but a “normal” market would be welcomed by a lot of our buyers.

Certainly, buyers are getting frustrated by the multiple offer situations and the “false” market price when a property is offered for $550,000 and ultimately sells for $650,000, completely pricing them out of the competition. Given our lack of inventory, consumer confidence, still low prices and great interest rates, there are more people who want to get into the market in Santa Barbara than we have homes to sell them.

As always, price and presentation are the predominant factors that sell homes. Contact your local Realtor today to discuss your game plan.

Laurel Abbott is a real estate agent with Prudential California Realty and president of the Santa Barbara Association of Realtors. Contact her at .(JavaScript must be enabled to view this email address) or 805.879.8050. The opinions expressed are her own.

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