It’s a great time to be a home seller in Southern California’s San Fernando Valley area. The region has seen record-breaking figures as far as local home prices go through most of 2019.
To put it in specific numbers, the California Association of Realtors’ 3rd Quarter Housing Affordability Report (released in November 2019) revealed that the median price for houses in Los Angeles County is $649,570.
Earlier this year, the Southland Regional Association of Realtors reported that homes in the San Fernando Valley were selling at a median sale price of $722,000 in June, a record high for the region.
These numbers are no fluke. Home prices in the county have increased by a whopping 73% from 2011 to 2018, according to the Associated Press based on data from the Case-Shiller Home Price Index.
Valley homeowners are huge beneficiaries from the housing market’s significant rebound from the last housing crash should they decide to sell their homes now.
Should You Base Your Asking Price on This Area-wide Average?
The short answer is no.
The numbers above may seem encouraging, but here’s a fact that should excite you even more: Real estate values vary, especially across Los Angeles‘ eclectic range of neighborhoods. Look for the figures for your local area when you’re pricing your home. Whether you’re looking at Brea homes for sale, condos for sale, or considering other parts of Southern California, understanding local dynamics is key.
The San Fernando Valley is known for its prestigious luxury communities. It’s a coveted residential destination that sees plenty of competition among homebuyers. Because of this, your home’s actual value is likely to be worth more than the county-wide median suggests.
In a high-end neighborhood like Studio City, for example, home prices are listed at $1.4 million on average and sell for $1.045 million (based on Zillow estimates as of September 2019).
A community like Valley Glen, meanwhile, has a median listing price of $790,000, with properties fetching $753,200 in actual sales.
Notice how far apart these local home prices are, while also being higher than the more general county-wide figure.
Why You Need to Price Your Home Right
There are a couple of things you’ll want to avoid when trying to arrive at the appropriate asking price for your home. First is being greedy. Second, making a judgment call on how much your property is worth.
Either way, you are likely going to end up overpricing your home – one of the biggest mistakes any home seller can make.
When you ask for too much for your home, you are more likely to lose than earn money.
Remember, Los Angeles home prices are already steep as they are. Buyers are cautious about exorbitantly priced listings, and if they are guided by savvy agents, they will ignore your listing altogether in favor of more appropriately priced options.
Even if you do get lucky and get an offer and a purchase agreement, you might still lose the deal when the buyer gets the property appraised and exposes your unreasonable mark-up.
If your listing stays untouched for weeks up to months, you’ll have to make drastic price cuts just to gain back the attention of serious buyers. You might even be forced to assign an asking price that falls below the property’s actual value.
How to Determine the Appropriate Asking Price for Your Home
To figure out how much you can sell your house for, use the latest pricing information reflecting listings and sales from your local area.
Ask your agent to help you conduct a comparative market analysis. Through this process, you will examine the prices of comparable or similar properties in your area. These “comps” include current homes for sale, recently sold properties, and even failed or canceled listings. Similarities are based on the property’s size, style, features, and location.
If you are considering doing it yourself, be aware of important limitations.
A quick online search can lead you to useful, publicly available references. But crunching numbers and analyzing technical market information can be too much work. A real estate agent can give you a faster and more accurate analysis.
Getting a professional home appraisal is another option for getting an objective value estimate for your property. However, it may be an unnecessary expense.
Your agent has already access to the market information you need, not to mention the expertise to analyze and communicate the data in simpler terms. In addition, buyers are often wary of trusting seller-paid appraisals.
