I had offers out on 2 different properties on Tuesday. One was a small duplex in south Miracle Mile, one was a townhome in prime West Hollywood. Both had multiple offers. We came in as strong we could on both, and I actually felt somewhat hopeful about both. Ah, but neither was meant to be. The duplex, I don’t know how many offers they had, but we came in 9% over the asking price and still didn’t get it. Apparently there were offers HIGHER than ours that were all cash. Strike one. The West Hollywood townhome had 13 offers in total, and although we came in about 3 or 4% over the asking price, word is it went at least 10% over the asking price. My guy never had a chance. Strike two.
So what is it that’s causing this frenzy? Well, it’s not a new thing, I can tell you that. It’s been happening for months now, and it is mostly attributable to the lack of good inventory out there right now. There’s just not much to choose from out there and buyers are starting to feel the pressure to overbid on properties that they really want. Combine that with interest rates that are still very low, and you have the perfect storm of conditions to start heating up the market.
The amount of cash buyers out there is also astounding. Some local, some from out of town, some out of the country. I’m seeing them pop up on most every deal. It certainly doesn’t make it easier for the everyman who’s been scrimping and saving to get that 20% down payment (or less). In a multiple offer situation, a strong cash offer will usually take the day. Not always, but often. I do know this. If I owned a property that I’d been waiting on the sidelines to think about putting on the market, NOW is when I’d jump into the fray.
I’m hopeful that as we get into summer, we’ll start to see more quality listings hit the market. Fingers crossed!