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Sunday, May 28, 2023

Valley homes

BY JOYZELLE DAVIS Staff Reporter Dr. Omid Javaherian recently purchased a new home in Tarzana for $963,000, and as soon as escrow closed he already had received an unsolicited offer to buy the 7,000-square-foot home for $1.15 million. Javaherian said the offer was tempting, but he ultimately decided against it because his wife adores the six-bedroom home and after spending seven months to find the house, he didn’t want to join the stampede of home shoppers again. “It’s rough out there,” Javaherian said. Realtors and home buyers across the Valley have similar tales of a feeding frenzy for homes in upscale markets. Spurred by growing confidence in California’s economy and stock market profits, many affluent Valley residents who had put off purchasing a larger home during the recent housing slump are now pounding the pavement before the market skyrockets. Already, the rise in home prices already has been remarkable. The median price of a La Canada Flintridge home during the second quarter, at $462,500, was up 20.1 percent from the first quarter, according to the California Association of Realtors. Double-digit increases in median home prices for the second quarter also occurred in Studio City, Glendale, Sherman Oaks and Tarzana. The volume of homes being sold in those communities was also up markedly in the second quarter, with Calabasas and Tarzana posting increases in excess of 50 percent over the first quarter. The surge in the prestige housing market is not limited to the Valley; that segment is fueling a residential real estate recovery for the entire county of Los Angeles. The 8,859 homes sold in Los Angeles County during July was 15.2 percent more than were sold in July 1996. The July median price of $172,000 was 4.2 percent higher than the July 1996 median, according to Acxiom/DataQuick Informations Systems, a real estate research firm. G.U. Krueger, deputy chief economist for the California Association of Realtors, said more people are jumping in to buy homes as prices are appreciating. “People can finally expect some return on their investment,” he said, adding that activity in the upper-end market creates a ripple effect that lifts all segments of the housing market. “It’s like the art market: If you can’t get a Picasso, you go for a Matisse and bid up the price of a Matisse. So you end up with something from that (painter) in Carmel.” Some San Fernando Valley communities, such as Encino, Sherman Oaks and sections of Tarzana, are particularly hot. Kathy King, manager of the Prudential Jon Douglas Co. Realty in Encino, said 38 San Fernando Valley homes sold for more than $1 million during the first half of this year, compared with 20 for the first six months of 1996. She noted that Encino has been the most active prestige home market, with 10 homes selling for more than $1 million in the first half of this year. “It’s not that there are more homes on the market, it’s that there are more people purchasing homes,” she said. “There’s a general confidence in the economy. A number of these people who are purchasing the $1 million-and-above homes either own their own businesses or have compensation packages tied to the performance of their company’s stock.” As the Valley’s prestige housing market has become increasingly competitive over the past few months, multiple offers and unsolicited bids have become commonplace, said Realtor Hezy Es-Haghian. “Buyers looking for homes in the $1 million-to-$1.5 million range simply don’t have a lot of choices,” said Es-Haghian, a Realtor with Prudential Jon Douglas in Encino. “And there are a lot of buyers in the market who’ve been waiting on the sidelines for a long time.” Dr. Javaherian and his wife were renting an apartment in Encino before they purchased their house in Tarzana. He said they’d been watching the housing market for a year, and once prices began to rise they decided to “catch the cycle” before it rose beyond their reach. Realtors say that many home buyers are price conscious, and a house must be “priced right” to draw multiple buying offers. “It all comes down to price, and the buyer is the person who determines if the seller is asking the right price,” said Evelyn Lambert, a Realtor with MacGregor Realty Inc. in La Canada. “Some sellers don’t understand that, and they get too optimistic in their asking price.” After their listed home lingers on the market with little or no action, Lambert said, sellers often adjust their asking price downward to put it more in line with the market value. Some seasoned home buyers, however, say sellers’ asking prices are nowhere near a reasonable level. “Sometimes it can be so frustrating,” said Linda Boss, who is looking for a home in La Canada. “You’ll look at a home and things will be just OK, then you see the price and it’s insane.” Linda Boss and her husband, Greg, grew up in La Canada and are currently renting a home there for themselves and their five children. The Bosses have pounded the pavement for the past year and have seen sellers become more aggressive in their pricing. “We really hope that we can get into the housing market before this cycle (of rising home values) takes off again,” she said. Sheryl Lyons, who is looking for a home in the east San Fernando Valley, said most of the homes she has seen have been fixer-uppers that aren’t worth getting into a bidding war over. She and her husband and son have been living with her parents in Northridge for the past three months while they search for a home. As their search wears on, Lyons said her resolve to pay a “fair” price is increasingly challenged. “I can’t say if I’ll eventually end up paying more than I’d like,” Lyons said. “But I do know that I want to have a life; I don’t want to have house payments for eternity.” Market forces, however, do not seem to be working in the Lyons’ favor. The supply of Valley homes remains tight as more buyers enter the market. Some Realtors predict the recently passed federal budget agreement will encourage more people to sell their homes because sellers will no longer get hit with a capital gains tax on the first $500,000 of profit for married couples and on the first $250,000 for individuals. “At the moment, there’s simply no (housing) inventory,” said Julie Ritchie, director of relocation for Coldwell Banker. “But the market should gradually right itself as more sellers understand the new tax rule and feel comfortable that they can make a (tax-free) capital gain.”

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