As experts debate whether the housing market is headed for another dip, sales activity remains brisk in some areas.
Homes in strong markets with lower-priced properties (under $500,000 or under $300,000, depending on the market) are selling quickly, said Steve Goddard, president of the California Assn. of Realtors and broker-manager of RE/MAX Beach Cities Realty in Manhattan Beach. "I think people feel that this is the last chance to get in on a good interest rate before prices go up again."
Goddard pointed out that in 2009, about 55% of all the properties sold in California had multiple offers.
"Properties priced right in certain markets are generating multiple offers and bidding wars," said West De Young, branch manager for Dilbeck Realtors in South Pasadena.
In March, Carrie Bryden, a sales associate with De Young's branch, watched in disbelief as her client with 50% down lost a bidding war to a cash buyer offering more than the $747,000 asking price. Bryden says the client is still looking for a home.
"They are in counteroffers right now on a multiple bid in Echo Park," she said.
Bryden said another client recently came out ahead when bidding on a home in Montecito Heights. But it wasn't easy.
"There were nine other offers on the home, but my client had 40% down and removed her appraisal contingency, which is the reason her offer was accepted over the others," Bryden said. ("I don't recommend buyers remove the appraisal contingency unless they really feel that house is worth what they are paying and have the extra money to cover any difference between the appraised value and the purchase price, which would not be covered in the loan," she added.)
Experts say tax credits are one element driving the trend.
"I thought things would cool off once the federal tax credit expired April 30. But California introduced additional tax credits, and those incentives are keeping the competition in the market," said Bryden, who has been selling real estate in Northeast L.A. since 2002. California's tax credit, which went into effect on May 1, provides as much as $10,000 relief for someone who buys a new or first home, claimed over three years.
Bryden says affordability is another factor luring buyers back to real estate.
"In 2006, my home was valued at about $1.1 million. Today, the house would probably sell for about $850,000. So there is more incentive because prices have declined so much," she said.
Even some higher-priced areas are seeing action.
Alex Lombardo, broker-owner for the Sunset Team Inc. at Keller Williams Realty in West Hollywood, says his luxury home market is seeing some strong competition from buyers looking for quality homes.
Four of the West Hollywood area properties he sold since March each garnered three or four offers, Lombardo said.
"My market, where prices range from $1.7 million to $2.2 million, was dead until the beginning of this year. But people with cash are coming on the market and looking for a good product. And the past three months have been amazing," he said.
Here is a look at a couple of homes for sale in a few niche markets.
427 Westbourne Dr., West Hollywood
Listed at $2.3 million at Redfin.com and on the market for two weeks, this 2010 two-story upscale home features a spacious architectural design, three bedrooms and 3 1/2 bathrooms in 4,796 square feet. It is walking distance from trendy Melrose Avenue and Robertson Boulevard.
4536 Bend Ave., L.A.
Built in 1924 and listed at $427,500 at Trulia.com, this Northeast Los Angeles single-family home is on a cul-de-sac and has an updated kitchen, two patios under a treetop canopy and three bedrooms and three bathrooms in 1,091 square feet.
3650 Roseview Ave., L.A.
Built in 1966 and listed at $749,000 at Trulia.com, this Mount Washington mid-century home features panoramic views, a fireplace in the dining room, a media room, three bedrooms and 3 1/2 bathrooms in 2,841 square feet.
-- Michelle Hofmann