I previously discussed the real estate trend of home sellers remaining in their home for a period of time (typically two weeks to three months) after close of escrow. In a competitive real estate market, terms a buyer offers (or accepts) are often as important as price. Click here to learn more about seller rent backs
I have seen more new listings come on the market in December, more than in prior years. Not a flood of listings, but a steady trickle that December does not typically bring. Not as many in La Canada, but more in Pasadena, Glendale and La Crescenta. And home buyers continue to snatch them up.
This is what I have gleaned from the new tax bill and it will have implications for California real estate; especially in more affluent neighborhoods, such as Toluca Lake, Pasadena, and La Canada. The higher end luxury market won’t likely be too impacted, because the wealthy don’t need the tax write-offs as much as the upper middle class. I predict that the two and half to five million dollar price range to be the most affected.
Currently, taxpayers can deduct their property taxes and California income tax from their federal returns. The new law limits these deductions to any combination of property, and California income tax to a $10,000 cap.
Then there’s the mortgage interest deduction: Previously you could write off interest on a one million dollar loan, this will change to a maximum of $750,000. The new cap will not be retroactive, it will apply to new mortgages.
And now for my real estate rant: Investors who make offers on vacant homes without seeing them. Last week I listed my friend’s mother’s Glendale condo. The condo is a front corner unit with a large patio. The kitchen and bathroom are original – (over fifty years old). My first offer was a full price cash offer; neither the Realtor nor their client viewed the unit. I contacted the daughter and she and I agreed that we weren’t going to accept an offer by someone who had not seen the property. We also wanted to wait for the open house because we thought the unit would sell over asking price. I had eight more offers. Two of the offers were cash, all were over asking price.
I too hear stories of people buying real estate sight unseen. But what I have experienced with investors is that they write a lot of offers, than after an offer is accepted they look at the property and then tend to renegotiate due to condition before even getting their deposit to escrow. Their offers are generally enticing enough for a homeowner to want to take the home off the market and try to open escrow. And there really is no way to know if their offer is “real”, without giving them the opportunity.
In this instance due to the lack of inventory, I felt confident the condo would sell quickly over asking price (and it did). The Realtor of the “blind” offer was very upset that his offer was not accepted or countered. He didn’t understand that until he and or his client viewed the property in person the seller was not taking him seriously.
In August, Douglas Ellman acquired Compass Real Estate and now has a Pasadena base. There will be more competition for the luxury real estate buyer and seller.
I expect to see a lot of new listings in January….at least I hope so given the unusual amount that came on the market in December.