The Pasadena real estate market may be getting a pulse. After sales declines of 50% for the last three months, sales continued to decline but unit sales were of by a mere 28%, compared to April ‘07. Compared to last month, unit sales increased from 38 to 51 units or 34%. Looking at some other key indicators such as days on market, it is still talking much longer to sell a house this year, which probably explains why homes are selling at a greater discount compared to their asking prices as evidenced by the percentage of sale price to list price.

According to Altos Research, there are 487 single family properties for sale in Pasadena, indicating a 9.5 months supply, very indicative of a buyers market.

Condo’s & Townhomes

Sales of condos and townhomes also decreased 14% compared to last year, but unit sales continued to decline by almost 50%. Compared to last month units increased from 25 to 31 and sales prices were down about 2% from $470,000 to $460,000. Last year we saw an increase in activity in new units which helped propel the median prices in this category. Now with the slower market, condos and townhomes are returning to median prices seen in 2006.

We are seeing some of the same characteristics as the single family market, mainly condos and townhomes are selling at a bigger discount to their listing prices. Altos Research reports that 289 condos & townhomes are available for sale. With 31 reported sales in April, a 9.3 months supply of inventory exists. If you would like the latest research information on the Pasadena real estate market, email me, indicating single family or condo.

A list of all the homes / townhomes that were sold in Pasadena, Altadena and South Pasadena for the month of April is available at up2daterealestate.

Note: We have modified our “days on market” with two numbers, (1) is days on market for the current listing period, (2) represents cummulative days on market indicating how long a property has been for sale. For instance, a property may have been for sale for 60 days and did not sell and was relisted with a new agent one week later. Numerically it would read 1/61.

Tags: pasadena housing market, Pasadena real estate, Pasadena Real Estate Agent

Home buyers are scarce and hard to find these days. The word is they soon may be declared an endangered species, by the local Realtor Association if home sales don’t increase soon. As inventory levels increase, many real estate agents will inform clients that they must increase the amount of commission offered on your property. In other words, you need to dangle a carrot out here as an incentive to sell your home. The question is “Does paying 6% insure your home will sell any sooner?”

Fact or Fiction?

It does appear after many months of decreasing commissions; rates are beginning to rise again. And why not, fear is a great motivator. Real estate agents are convincing clients they must pay more in a declining market in order to increase the likelihood of a sale. Sales commissions have usually been split 50/50 between the listing and selling agents. In a seller’s market commissions declined due to more competition among real estate brokers. Many new business models flourished and the real estate industry offers few barriers to entry. These same companies that did well in a seller’s market are finding the going much tougher when overall sales decline by 50%. As a result, the well established companies that have been around a while and are considered the more traditional models remain despite the market dips.

I last looked at commission rates in our area last June. Based upon the search results below, there has been a trend for consumers to pay more to sell their homes.

While the majority of homes sold continue to offer a 2.5% commission, the number has declined to 56% of the homes sold compared to 70% almost a year ago. Property owners offering a 3% commission increased to 40% from 24%.

Do Homes Sell Faster Offering a Higher Commission?

This is the $64,000 question. I compiled Pasadena home sales from October ‘07 to March ‘08. While it appears that properties offering a 2.5% commission outnumbered those offering 3% by a margin of 4:3, it took those homes 7 days longer to sell, comparing the median days on market. However, analyzing the average days on market the situation was reversed, selling 8 days sooner. Based upon this analysis, I would have to say increasing the commission offered, begets no real advantage. While extremes do exist, a competitive commission reflective of the area will present your home in a positive manner.

Selling Your Home

The number one key to selling your home is getting it priced correctly. End of story. Now there are supplemental factors consisting of condition, timing, amenities, location and competition. Noticeably absent is THE COMMISSION. With 75% of home buyers beginning a search on the internet, the commission offered to the selling agent is no where in sight. I don’t know of any agent that has ever called our office saying they were working with a buyer who only wanted to buy a house offering a 3% commission. And if 3% was sacrosanct, wouldn’t you think licensed real estate agents would offer 3% on their own properties? We will have to keep an eye on this.

In a market where values are declining and the median price of a Pasadena home is $675,000, a savings of 1% or $6750 is an advantage. As with any category, price is determined by market forces. No agent or brokerage company is going to change that. After all it is your equity.

And now for the usual disclosure “The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and may be negotiable between Seller and Broker”.

Tags: pasadena california homes, Pasadena Real Estate Agent, pasadena reale state

We’ve all heard the real estate success stories when people purchased an investment home at a low price and then were flabbergasted at the 5 or 6 digit appreciation they realized when they sold it a few years later.  Everyday in the news, we hear or read about our country’s current economic slowdown, triggering a possible recession and responsible for the subsequent down turn of the Pasadena real estate market.  Is this the real estate trifecta we’ve been waiting for?

Let’s take a closer look at the city of Pasadena.  There is a large inventory of homes available on the market today.  In Pasadena, experts estimate about 10 months worth.  The average selling cycle to sell a home often exceeds 100 days with selling prices  well below asking price sometimes up to or greater than 10%.  In addition, the number of home foreclosures & short sales is greater than in past years.  In all, it seems as though, today’s real estate market is prime to purchase a solid investment residential property in a desirable neighborhood at a reasonable price.

OK, let’s go on this hypothetical journey, you purchase an investment home.  Am I going to get a decent rental income?  Who am I going to rent it to?  Is there a demand for homes to rent?   All of these questions have different variables (i.e. size, location, available amenities in the home) that prohibit an absolute answer to them.  However, according to the MLS, the median monthly rental price in Pasadena for the past year (3/07-3/08), is $ 2200.  With the availability of numerous websites for potential renters, advertising a home to rent is easy, inexpensive and accessible to more people.  With the increase in foreclosures, there is and will be a rise in the number of people/families needing to rent.  Plus, these people will be renting long-term in order to save for a down payment towards a future home. 

So, did we hit the real estate trifecta?  No one knows for sure.  Take a closer look.  Do some research on the internet, meet with your local real estate agent and financial counselor to examine the numbers.  Who knows…in five years, you may be the one boasting of the great real estate investment.

Tags: , Pasadena Investment Properties, Pasadena real estate, Pasadena Real Estate Agent