The most challenging part of the real estate market in California today is the lack of inventory. Most residential real estate transactions are involving multiple offers, which is pushing home prices higher than their list prices. In addition, houses are being snatched up within days of being placed on the market.
The regular bidding wars taking place in California are contrary to what is happening nationwide. Around the United States, bidding wars are actually dropping, from 63 percent in March of 2014 to 61 percent now. In some California cities, however, a majority of homes are going into situations involving multiple offers, and in some cases, most homes are selling for more than their asking prices.
Part of the reason for the bidding wars is that prices are climbing while inventory is going down. In addition, interest rates continue to be at their lowest point in years. However, real estate agents have experienced success even in today's highly competitive buyers' market by providing detailed cover letters, paying in all cash, waiving inspections or waiving financing contingencies.
When going through residential real estate transactions in California, agents are encouraged to remain creative, while buyers are encouraged to remain patient and confident, as real estate can still be an excellent investment if it is purchased properly. Sellers can easily benefit from the market right now, potentially getting more than they expected in the final selling price. An applied understanding of the law may help both buyers and sellers to efficiently accomplish their unique goals in the current real estate market.
Source: equities.com, "California's Real Estate Bidding Wars", Ben Stoodley, June 22, 2016