Hollywood Riviera & South Bay Real Estate Blog

Broker’s Open House - what is it?

Broker’s Open House is one of the most important open houses a listing agent/seller can hold.  They are held during the week and during specific hours that are set by the local board of realtors.  For instance, in Redondo Beach, Hollywood Riviera and Torrance, Thursdays from 12-2 is the traditional time for broker’s to host their broker’s opens.  In Palos Verdes areas - Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes and Palos Verdes Estates - broker’s host their listings open on Tuesdays from 11-1.  The other main South Bay broker’s open house day is Friday and that is for the Hermosa & Manhattan Beach areas….that is also usually from 12-2.  It’s nice when the broker’s make it from 12-2:30 (or 1:30 in PV area) as sometimes their is a lot of area to cover in a short amount of time.   That extra half an hour can make a big difference.

Real estate agents advertise their broker’s opens lots of ways…but the most economical (free) and the easiest way for agents to find out what houses are open is right through our Multiple Listing Service.  We can easily load the open house times into the MLS and it’s easy to check that morning for the Open House List.  Of course, there are other means of advertising that work and many of us employ all the ways in order to attract as many agents as possible to the new listings.  The Easy Reader has a free open house listing for agents…you have to know what your plan is though by Tuesday at noon.  (PV agents never use any other way of advertising their Broker’s Opens though besides the MLS.  That makes life so easy, I’ll tell ya.  Wish the Beach Cities would jump on that boat.)  Professional Flyer Service hands out flyers that they drop off  for free at the different brokerages - seems like a waste of paper (and trees) to me.   Their is a fee for advertising w/ PFS.   Some of the title reps have a service they provide (also gratisse) to help in earning their client’s business….Jim McFarland w/ Southland Title does a great job of this.  And lastly, the Beach Reporter has a popular open house guide, especially for the Hermosa & Manhattan Beach properties.   I find it highly disorganized and hard to read though.  And I believe they used to offer this service of listing broker’s open houses for free and now they only will do it if you advertise in their publication. 

Agents typically provide lunch or snacks for the hungry agents that drive around from house to house checking out the new inventory.  Good agents do this on a regular basis to keep up with the new inventory.  Agents who specialize in certain areas typically just go on certain days.  You do tend to see the same agents over and over and these are typically the ones that are doing business….this is why they are doing business.  They are out working.  It is also a great way to network with other agents and discuss what may be coming on the market or how to improve listings or pricing strategies.  It is very important to get good feedback from the realtors that you work with.  You never know when they are going to be the agent you are working with to make a deal come together and it helps to get along. 

This market is changing as we speak.  Right before our eyes it is very different all of a sudden.  Spring is usually a great time to put your house on the market and I still believe it is, but don’t expect the old days’ of the last 4-5 years. 

We are still seeing multiple offers believe it or not ~ music to our seller’s ears ~ but they are not the same multiple offers of the last 5 years.  Now we are seeing “lowball multiple offers.”  And this is after only days on the market when the buyers know there are other offes.  We just had one where the buyer actually made their counter offer worse than their original offer and this was in a  multiple offer situation.  Crazy!  They did not get the house!

Pricing is all too critical now for sellers.  Staging is critical as well…having “the house on the market” that stands out from the rest and that is priced slightly under it’s competition is the key.  Pricing is not as easy to do as it was over the last 5 years.  Our number of sales are way down, so there is little sold inventory to compare to.  Even though our 2008 sold prices are seemingly 6% higher than this time same quarter 2007, one can not build that into their sales price.  I would ascertain that the 6% rise in average price for the Hollywood Riviera this year over last is due to some very high end homes selling this year and thus raising the average.  We have also seen the lowest price sale in a long time occur this year -2008- $575,000 for a fixer upper in the lower Torrance side of the Riviera.  That is lower than the last low sale of $605,000 which was an even worse location on the Pacific Coast Highway service street of the lower Torrance side of the Riviera.    We have quite a diversity of homes in our “designated-by-the-MLS” Hollywood Riviera neighborhood.  There are definitely two sides to the Riviera and two separate price ranges that go along with the different addresses. 

To date the 90277 (Redondo Beach) side of the Riviera has an average sales price of $1,375K and the 90505 (Torrance) side of the Riviera has an average sales price of $946K.  That is a $444,000 price discrepancy.  Wow - a 32% price difference. 

This is interesting here….the Redondo Beach side (90277 only) had an average price of sold homes this same period last year (Jan 1 - May 2, 2007) of $1,195K.  That means the RB side has gone up 14% year over year - same time period.  Now the number of sales has gone down from 23 last year to 11 this year…that’s more than a 50% drop.   The Torrance side had an average price this same period last year of $951K and it’s $946K this year.  They had a drop in their year over year average price of 1/2%.  Not much, but not the increase in average price the RB side had.  There were 7 houses sold in 2007 Jan - May 2nd 2007 and 9 solds for 2008.   About the same which makes their numbers a bit more in line with each other. 

Here’s the map of the Riviera with the dividing line in different colors.

There are currently 27 single family homes on the market as of today with the average Days on Market at 61.    11 of those actively listed properties have reduced their prices at least once.  The highest price is $2,295,000 for a home in a gated planned community called Riviera Beach Colony - it’s a lovely home just steps to the beach.  The lowest priced home is $650,000 on Pacific Coast Highway - the service street. 

As far as what’s in escrow currently - there are 9 homes pending sale and their average days on market was also 61.  2 of those properties reduced their price once before going under contract.  The highest price pending home is $1,999,000 for a gorgeous new construction home with an ocean view on the corner of Calle Mayor and Via Pasqual.  It’s not quite done yet and never hit the MLS as active; it just came on as pending.  The lowest price pending property is $650,000 and it’s down on Highgrove and needed some work. 

As far as what’s sold this year - 2008 - we’ve got 16 sales so far.  It’s a far cry from this time last year (2007 had 28 homes sold by now) as far as number of units sold.  This year is off by 43% for number of units sold. A lot of people are clearly “waiting it out.”  We do have the same number of actively listed homes though - but many of those have been on the market a long time….a couple for over a year!  The only good news here for 2008 so far is that the average price is actually up 8% with the average price for 2008 sales coming in at $1,228K and average price from 2007 sales (same period January 1st - April 22nd) coming in at $1,129K.   The most expensive home sold in 2008 so far was $2,425,000 and it was gorgeous with the most amazing views!!  It is one of the most expensive homes ever sold here in the Riviera, short of the homes on the Paseo de la Playa bluffs.  The least expensive home sold in 2008 was $605,000 on that same PCH service street as mentioned above. 

One area to look at as well when mentioning the Hollywood Riviera is the difference in the Torrance side (90505) and the Redondo Beach side (90277.)   See my article - “Hollywood Riviera - Where is that Anyway” for a map of the different sides.  The Torrance side’s solds in 2008 average price was $958,00 (6 units) and the Redondo Beach side’s average price was $1,390,000 (10 units.)  Big Difference here!

Stay tuned for next months update!

What is the difference between Contingent and Pending?  Well - technically both these descriptions refer to properties that are “in escrow.”  In Escrow refers to a property that is under contract.  Typically the first 17 days of the contract are “contingent” days - contingent on inspections of the property, review of disclosures, appraisal and financing approval, to name a few. 

So does the listing agent put the property into a “contingent” or “pending” status in the MLS?  Agents are required by their Board of Realtors to enter “active” listings into one of these categories after a contract is accepted between the buyer and seller.  Realtors actually have other choices as well - Back Up Offers, First Right of Refusal (this one is new.)  The two most common are Contingent and/or Pending.  If the contract seems pretty “solid” right off the bat there is not much of a decision - it goes into Pending.  Technically a contingent entry is still considered a property to be “available for showing” by realtors.  One good reason for a contingent status: the seller accepted a “contingent on the sale of buyers’ property” contract.  This is typically the reason to put a property into the Contingent Status.  The Board of Realtors considers the Contingent status as one that is still “active” and continues the Days on Market (DOM) Clock still counting.  Many agents don’t know this and put properties into Contingent Status for no real reason - not because they accepted a “contingent offer.”  Only the Pending status stops the DOM clock from counting!  If a property is in Contingent Status the Days Under Contract are included in the “market time.” 

This creates a problem for agents who may be checking comps for properties and using DOM as a statistic…..often if a property is entered in Contingent Status, agents never take it out of that status and the clock ticks on the entire time it’s under contract and it would then appear that is sat on the market for much longer than it really did.  Laura and I for one would like for all agents to know this is how it works and start to use the Pending status if a property is in escrow.  We all know that no one shows contingent status properties.  Maybe you occasionally get a phone call from another agent curious if the escrow is strong or now…but if they want to know they will call on and status. 

Let’s all put properties into Pending from now on unless an escrow truly is contingent on the sale of a buyer’s property.  (Especially when this really doesn’t happen that often anyway.)  That way we can all really know how long a property was really on the market - our DOM can become more accurate that way!

We are in Oauhu this week - it’s gorgeous here.  Having a passion for real estate means we never stop thinking about it or being curious.  While walking along the path that leads around Diamond Head we sure saw some gorgeous properties….wow - what views!  These are the upper end around here!

In reading the Honolulu Advertiser - the local paper - the business section reported on April 9th that the number of units sold  is much lower than last year, but the median price is higher. This was also reiterated in the Island Real Estate Blog with data to back it up.  This is exactly what we see happening in the South Bay cities as well.  Last night at a lovely dinner at Roy’s we met a couple from Atlanta, Georgia.  It just so happened that Norrine is a realtor for Jenny Pruitt Realty.  She said they represent a higher end clientele and are also experiencing a slower pace of sales (fewer units sold) yet a higher and or stable average pricing.

It is interesting to see how the higher end neighborhoods are consistently the same across the country….and we are seeing three samples here from all “ends” of the country - Atlanta, South Bay of Los Angeles & Honolulu.