Are OC Homes Priced Lower to Draw Higher Bidders?

Redfin CEO, Glen Kelman had this to say about the market - Our deals over the past two months have been closing at 96.2 percent of list. Agents on both sides of the deal have plenty of work to do to bring the parties together. As listing agents price properties more aggressively, there’s less room to negotiate.
One of our best agents, Erin Eckert, noticed new teaser pricing: low-priced listings attracting eight or even, in one case, 13 offers. Some buyers bid on these properties assuming they can still ask for a further discount, but the listing agent priced the property to create an auction; the final price is often actually a premium to list price. Maybe this means we’ve found, for now, a bottom. Or maybe not.
Buyer activity has certainly increased. Since our last update, Orange County traffic on our site is up 110 percent, faster than any other that Redfin serves.
In part, this is due to more buyers, but, in part, it is due to more activity from those buyers: Properties (5.91) evaluated on each visit to our site are up 16 percent over the past month, a fairly steep increase. Generally, Orange County buyers visit more properties online than any other visitor on our site.
Comparing Feb. 15-March 14 to Jan. 15-Feb. 14, visitors making offers on Orange County properties increased about 13 percent. A nice increase, but one that hardly corresponds to the 110 percent increase in online search activity.
This tells us a lot of O.C. folks are just kicking the tires. Two weeks ago, we saw an 83 percent increase in offers over our per-week average for the past month, but this may be an anomaly, not a long-term trend.
Buyers we are seeing are unlikely to stabilize prices: Over the past two months, 50 percent of our offers have been on short sales, where a house is listed for less than the owner owes the bank. February data in the MLS serving Orange County shows 23 percent of the listings as short sales, but just 11.6 percent of pending deals are short sales. These properties are much more difficult to buy and sell, mostly because the bank dawdles on approving the deal while the owner continues to pay his mortgage. It seems like buyers haven’t really figured this out yet.
Excluding those short sales, where it’s perilous to count any chickens before they hatch, our close rate on deals has remained around 20 percent since our February posting here. Of all the markets Redfin serves, none has a lower close rate than Orange County. We think it’s a reflection of a rapidly changing, high-anxiety market.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at http://www.ocdreamhomesandland.com/