Pasadena residential real estate market shows signs of rebound despite pandemic, experts say – Pasadena Now

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Home sales in Pasadena are showing strong signs of a month-over-month post-pandemic recovery, though a shortage of inventory appears to be the limiting factor slowing progress, experts said.

Local home sales in June rose 66% from what turned out to be a miserable May for the residential real estate market (108 transactions vs 65), according to data compiled by Trendgraphix.

While the figure represents a 21% decline from the 137 homes sold in Pasadena in June 2019, May sales were down 48% from transactions the year before, the data showed.

Property experts pointed out that sales figures were often behind by a month or more, as homes typically spend 30 days or more in escrow before sales become final.

Adam Bray-Ali, a real estate agent with Coldwell Banker in Pasadena and a member of the Pasadena-Foothills Association of Realtors, said he first noticed the pace picking up in late May.

“And sales increased again in June. So our June stats were very, very strong, and July looks strong as well,” he said.

At the state level, the California Association of Realtors echoed the sentiment, saying in a July 22 report, “Things continue to slowly improve, but it’s clear that a full recovery is still some way off.”

“Following a record 41.4% drop in closed deals in May 2020 due to coronavirus-related shelter-in-place orders, California saw home sales numbers rebound strongly in June,” CAR said in a statement. a statement. written statement. “Home sales are up over 40% month over month. And while California is still below 2019 levels of 12.8%, this is a marked improvement from levels below 300,000 in April and May.

Buyers are plentiful, and many homes get multiple agents, Bray-Ali said. But it’s the availability of homes for sale that’s the bottleneck, he said, with 235 homes available for sale in Pasadena at the end of June, compared to 355 in June of last year.

“The impact on the market, especially in Pasadena, is that we saw a drop in the number of homes available for sale. And that was in all price ranges,” he said. “But demand for these homes has remained relatively stable. As the months pass, interest rates decline, which we now consider generationally and historically low below 3% [are] actually creating even more demand.

The economic fallout and uncertainty of the pandemic has taken its toll on many people and has no doubt placed some people who would otherwise be in the market for a home in positions where they are unwilling or unable to purchase a home. home, Bray-Ali said.

“But people who want to buy homes have had increased purchasing power because of lower interest rates.”

The result is a strong seller’s market, he said.

“Essentially, for every home sold in June 2020, there are 2.2 more on the market,” according to Bray-Ali. Traditionally, a ratio of six would indicate a move into a buyer’s market.

“There could be five to 10 people trying to buy a house,” he said.

Home prices have also been encouraging, Bray-Ali said.

“We generally view selling prices as an indicator of how the market is moving, and selling prices over the past four months have been flat or up,” he said.

Bill Podley, a partner at real estate firm deasy penner podley in Pasadena, was also pleased with market activity in recent weeks.

“We felt things really ramped up in May and buyers started to really engage. Obviously it slowed down for 40 to 45 days from mid-March to April,” he said. he said, “People kind of froze in place, but a lot of activity started picking up in May. So June reflects, of course, the closings of transactions that would have gone into receivership in April and May.” »

Podley said the increase was, “partly because of low interest rates, and partly because there are people who usually want to buy at this time of year who have been shut out because of what was really, I would say, until a complete 60-day downturn in activity from mid-March to mid-May.

“[Home prices] are stable and they are increasing,” he added.

Financing can pose a challenge for some buyers, Podley said. “For the self-employed, it is much more difficult to obtain a loan. And that’s because banks and mortgage companies fear that if you’re self-employed, will your income continue? Whereas if you are in a stable salary position in a field that does not seem to be affected by COVID-19, they pose a better risk.

“It doesn’t surprise me, because I think lenders are more cautious. But with interest rates below 3% — we’ve never seen that, or we see it and it’s quickly disappearing. It lasts a week and then lenders are inundated and rates go back up,” Podley said. “But that seems to be a fairly sustained level of 2% to 2.5% on a 15-year conforming loan, up to 3.75% or 3.5% for a jumbo loan. These are attractive prices.

Todd Hays, partner at deasy penner podley, said he also found that the number of homes put up for sale was the main factor preventing sales from being significantly higher.

“It’s only because we don’t have the inventory to sell,” he said. “There are multiples of houses that had 20 to 30 offers. We could have sold the exact same house 25 times. But we don’t have 25. We only have one, so we have to wait for the same type of house to come on the market. »

“So I think the imperative message to get across to sellers right now is that it’s an absolutely amazing time to list and sell your home,” according to Hays. “You may find it difficult to buy a new one. But you will have no trouble selling it. And the other thing is, if the price is fixed, you’re going to have multiple bids, which puts the sellers in charge, which is exactly where a seller wants to be. » George Penner, CEO of deasy penner podley, agreed with the size of his colleagues.

“On March 15, the market completely stalled,” he said. “It basically lasted until June when we came back online.”

“We’ve seen a pop in sales over the last two months since June 1,” Penner said. “Inventory remains low, still. And that’s a persistent problem that we’ve had for some time. We’re probably looking at two months of housing inventory, and in a normalized market that would be six to eight months of inventory. So there is always demand and certainly a lot of interest.

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