Everyone is looking forward to the day when the real estate market starts improving. According to Jeanne Koopman a real estate with Pacific Sotheby with 13 years experience stated, “I have to say, I’ve seen prices coming up a little more, especially in my neighborhood in the last year and a half.” Ms. Koopman lives close by the Village, which offers quite a bit for buyers with amenities within walking distance such as post office, farmers market, restaurants, library, and banks. This is why she personally moved to the area six years ago.
She stated, “When you have an open house in La Mesa, you have a lot of people coming by, but it has to be priced right. People are still looking for a deal. Many of the people looking, grew up here, now have families and want to come back.”
Homes close by the Village are selling faster than other areas but to many this is not a huge surprise. The homes are normally smaller and when it comes to price, they are in the first tier. Aaron M. Kerper, a La Mesa Realtor with Prudential California Realty, as well as the current president of the East San Diego County Board of Realtors stated this signifies a “seller’s market.”
Those are certainly words we have not heard in a long time. Aaron Kerper explains the reason he is stating it is a sellers market after going over the graphs, charts, and statistics.
Kerper explanation, “With respect to La Mesa (zip codes 91941 and 91942), we actually have several different markets operating within those zip codes, depending on the price-point and the type of home being offered.” “Looking at the last two years, it’s a seller’s market in the under $400K market. Homes are selling at close to asking price—with prices up 5.1% in June over the same month two years ago, up 1.6% year over year.” “Lenders are now agreeing to do short sales and banks are putting their homes on the market. There are 25% more homes on the market, 65% more in escrow and 70% more sold than two years ago. Property is moving through the pipeline at this price point.”
One house that is being held open by Jeanne Koopman in North Mesa is one of the largest in the community at 2550 square feet. The home has been on the market for one hundred days listed for $375,000. This is a traditional sale. The home owners selling the home are in the middle of a divorce and are motivated sellers. Koopman believes the home will sell, but it will take more time. The home needs a few repairs and is the largest home in the area.
When you have six months of inventory on the market is it considered a “market in the balance.” At the price range there are 2.6 months of inventory which definitely shows a sellers market.
Kerper teaches real estate courses at Grossmont/Cuyamaca and Southwestern Colleges takes a different look at the stats a more academic view. “Looking at the history is very important. Unlike the stock market, you have to be willing to look it at over a span of time. There are more properties on the market in the last few months than there were two years ago. Two years ago, there was a lot of uncertainty or fear. People were hunkering down and people in distress couldn’t get their properties on the market.” Basically,” Kerper stated, “the market has corrected itself. Sellers are putting their homes on the market at realistic prices.”
In the La Mesa area, more homes are coming to the market in the $400K to $800K price range. Banks are working with buyers for foreclosures and short sales. However, with more than 6 months of inventory and a large difference between the list prices and the selling price it makes the area a buyers market in this price range.
“This has been a very hard-hit group. There are not first-time buyers in this price range. These buyers are more particular—looking for a “wow” factor—their move is more a “want” than a “need.” But what’s important for sellers to know is that the market is still moving,”
A restored historic Craftsman home listed by Jill Smith of Leonard Smith Associates one block from the Village is listed for $449,000, which is the low end of the tier. This home has been on the market two months. The home owners have been renting the home out for the last year. As soon as the tenants gave notice, they were moving the home owners but the home on the market. The home is in excellent condition with a separate workshop and parking in the alley.
“There are definitely more people out there looking,” he says. “But it’s the banks that are holding us up.”
Kerper added, “Availability of credit is important. As you go up in price, the market tightens. If jumbo loans are not available or offered only at high interest rates, that means significant down payments are being required. So it’s a different picture for homes in the $400K to $800K price point.”
Across the hill, a traditional sale listed by Peg and Tom Keeley of Keller Williams with homeowners that really do not wish to move but are looking to downsize. The homeowners are wanting to not only downside but also move closer to their daughter living in North County.
She explains the downstairs could be converted to a “granny flat.” It is a basement that has a separate entrance, private bath, along with fireplace. The value range is $619,900 to $639,900, which is in the 2nd tier pricing. The home has been on the market a little over 2 months.
“More buyers are coming out, but the sales are still pretty stagnant. He points out that the maximum amount FHA will loan is coming down to $540K in October. This could help spur the sale of this home.”
Mark and Joy Berner, real estate agents with Century 21 Award, have a home listing with a prominent Russell Road address on Mt. Helix for $995,000. The floor plan was created by the owners with entertaining guests in mind. A few of the furnishings are a bit dated since it was built in 1962 however, the floor-to-ceiling windows offer breath taking views.
“At the upper end, things are still pretty slow,” Joy Berner stated. During open houses, the home is getting quite a bit of traffic. If this home had been on the market a few years back it would have been a bidding war. Today, the home has been on the market close to 100 days and has been in escrow once, but it fell through.
Aaron Kerper corroborates the depressed state seen at the higher end of the market with homes in the price of $800K to $1.5 million.
“There was a period three months earlier this year when no homes in this price point sold. There has been a tremendous fluctuation in home prices at this end of the market. Currently there is a one-year inventory of these homes, and even though that is less than last year, it most certainly is a ‘buyer’s market’ in this price range. If you compare it to 2004-05, prices between $1.5 million and $3 million don’t exist anymore.”
Attached homes in La Mesa are mainly priced around $50K to $249K, and according to Kerper priced at this lower price point, which represents a “seller’s market.” The number of attached homes that are for sale, pending, and sold increased last month. The number of units on the market increase by 155 percent over 2009 but there is only 3.8% inventory. “People gravitate towards these because they’re affordable,” says Kerper.
The real estate market in La Mesa may not be coming back strong, but we are seeing a sellers market in two different segments, which are under-$400K single-family homes and attached homes. Sales are still slow and prices more open to discussion in the $500K+ range.
Kerper stated, “I am a third-generation real estate broker. When my family came here, La Mesa was the first place they settled. My grandfather built his first home here. One of my grandmothers still lives here on Severin Drive. Although I work all over, I concentrate my business in East County. I’ve been with the Prudential office in La Mesa for 11 years.” “La Mesa remains a place that people seek out and find desirable—East County’s finest community.”