[vc_row][vc_column][vc_column_text]Last month we posted an analysis of the Arcadia residential real estate market. This month we’re taking a look at nearby Monrovia. First of all, we need to state that we purposefully waited until after the recent Presidential election to do this analysis as we were hopeful that the results and the reaction to them would give us some clarity on where our residential real estate markets would be heading soon. Presidential elections always cause a stalling in market action before they occur and then a release of some kind afterwards. Thus, our decision to wait and see what happened and how the market reacted immediately afterwards. Well – sorry! With the unusual events following the recent election, that “stalling” pattern has been drawn out, and anything we might have gleaned from it is still in the future, thus our reference to “treading water” in the title of this article. It’s not that we’re drowning, it’s just that we’re not moving forward or backward. We’re pretty much not moving. And – that’s not all bad. However, none of this means we are completely in the dark. We’ve waited until the November numbers were released, and we will dissect them here, with an eye to the fact that our release from “Election Market Stasis” has been a bit delayed. So – let’s dive right in – take a look at some numbers – and discuss what they mean. As I mentioned, these numbers are based on the November numbers, which were just released a couple of days ago.
Monrovia - Median Sale PriceMedian Sale Price September 2020 - $684,500 This is down from a 5 year high in Jul 2020 of $835,250. Median prices since Nov 2015 low consolidating between $835,250 and $482,500. What we see in the price action is a market that hasn't stumbled – yet. You can see a steady uptrend here in prices over the 5 year period. The market makes a move upwards, then retraces a bit and consolidates, and then makes another move upwards. This is all normal, trending market movement, and the trend is up. You can also see that things got a little dicey in Monrovia with a precipitous drop between April and June of this year. That is the “Pandemic Drop” when the pandemic first took hold and many believed that the real estate markets would simply stall out. That didn’t happen, and activity and pricing soon rebounded. Now, we’ve moved several steps beyond that time. Currently, the ongoing post-election “brouhaha” and the resurging pandemic are causing more unrest in the market and are pressuring prices down a bit. However, it should be noted that – at this writing, at least – the November numbers are still above those of last June, and well within that upward trending range, and our November numbers ended just 6.9% below those of November last year.
Monrovia - Number Of Homes SoldHomes Sold November 2020 - 30 This is down from a 5-year high in July 2018 of 46 sold. This is up from our 5-year low last April of 18. At this point, all these numbers combine to give us a forceful picture of – nothing. That’s not to say that nothing is happening. It is. Business as usual seems to be happening. What is not happening is any indication of where the market may be going in the near future in regard to activity, which is what we’re looking at here. On the chart, we can see the high in July of 2018, and then the low of last April at the bottom of the “Pandemic Drop”. Since that time activity rebounded sharply and then retraced and consolidated. Now, it is just about at our 5-year average, which is 32. So – we’re about “average” in activity, and apparently, we’re waiting for the Holidays – and possibly the inauguration in January -- to be over before the market is going to clue us in on any decision as to direction.
Monrovia Housing - Days On The MarketMedian Days on the Market November 2020 - 40 This is down from a high in December 2019 of 90. It is up from a low in September 2016 of 13. This is one of those crazy indices where we want low numbers and not high ones. The shorter the time on the market, the better the market indication, right? Well – right! But it can still get confusing! Especially when a particular index doesn’t seem to follow any given logic. These numbers show a 5-year low back in September of 2016 at 13 days on the market – average – for all sold properties in November of that year. From that low, the number crept upwards until it made a stab into the upper stratospheres with our high in December of 2019 at 90 days on the market. The main thing to remember about the DOM information is this: these figures are based on the average property. The only problem with that is that there is no average property. The best way to use this index is as a prospective Seller’s road map. For instance, if we look at our current figure of 40 days on the market, this the number of days the average property that sold, remained on the market before it did sell. Now, that figure can be taken in conjunction with the Median Sale Price for November, which is $694,500. If we put these both together, we can estimate that, since ½ of all listings will sell in less time than the average, and ½ will sell in more time – then we can say that those that are priced less than $694,500 will probably take less than 40 days to sell while those that are priced higher will take more than 40 days. Bottom line here: The 5-year average in this index is 51, and we’re not far off with only consolidating action seen in the graph. This is another one that’s not giving away any secrets about what’s coming in the near future.
Pricing NumbersSale to List Price – 101.6% - 2.6% higher than this time last year. Homes Sold Above List Price – 53.3% - 16.4% higher than this time last year. Home Sold After Price Drops – 10.3% - 10% higher than this time last year. The Sale to List Price comparison index is moving in a channel range between the 5-year high of 102.6% in September of 2016, and the low of 97.1% reached in December of 2019. Since that low, the trend has been upwards to our present number of 101.6%. This is above the 5-year average of 99.85%, and means that – on the average – Monrovia homes are selling for something above the listing prices. This is reflective of heavy competition among Buyers at the moment, and does weight the market towards Sellers holding the reins. The number of Homes Sold Above the Listing Price index is just over our 5-year average of 43.15%, and the Homes Sold After Price Drops index is just below our 5-year average of 12.75%. These are also indicators of a healthy market, weighted slightly in the Seller’s advantage.
Market SummaryAs with our Arcadia market analysis of a few weeks ago, this market is obviously in consolidation. If we are forced to assign a “trend” to it, it is definitely still “up”. There are no obvious signs of any kind of future distress appearing in home sales or pricing. There is, however, the picture of a market that is simply not ready – as yet – to commit to a trend one way or another. Elsewhere in these pages we have talked about how election years can cause markets to climb, fall – and simply stall with no sense of direction. In this market we have Buyers who believe this is the time to buy and Sellers who believe this is the time to sell – and not all of their decisions are based on the kind of “investment logic” that guides us in any market analysis. Many are motivated by things other than getting the best buy or selling at the highest price. And, many of these motivations are spurred by things political and social. This year has been a difficult one for everyone. And, many different factors contribute to the main thing that creates market action: people. How they feel, what they think, and what they do is the basis for all market action. And, right now, lots of people don’t quite know what to think, how to feel, or what to do. That is evident in our markets these days, and the current Monrovia residential real estate market is no exception. Here’s hoping that 2021 will bring a clearing of the fog from our eyes and present a clearer, brighter future. At this point we can take solace in the fact that the market is stable, within average ranges on all accounts, and shows no sign of any imminent disasters. And, we’re not out of bounds hoping that when a trend does start to develop, it will be a healthy one.
IMPORTANT NOTEMost of what we've been speaking of here has been a look at the Monrovia residential real estate market from an investment focused viewpoint. However, we all know that is not the only viewpoint. Not all of our investment or life moves can always be completely attuned to the markets. There are things other than the markets. Sometimes our spouse, our children -- even our selves -- must take precedence. Sometimes we need to sell when the market is telling us to stand aside for a while in anticipation of a higher price. Sometimes we need -- or just want -- to buy when it might be more prudent to wait for a market dip. Not everything can be guided by market timing. If you are a Buyer looking to purchase your "dream home" in the Monrovia area, now is always the best time to move. Remember, if you are looking to buy a home to live in for a number of years -- possibly even for decades -- you will likely see a number of real estate market "turn arounds" during your tenure there. The bottom line is, if you find your "dream home" now -- then now is probably the best time to buy it. The joy of moving into your new family home can far outweigh the knowledge that you hit the market just right. Markets do two things: they go up and they go down. If you're going to spend years in your new home, you'll probably see it do both -- and more than once, and "dream homes" come along when they decide to. If you are looking for any kind of assistance in looking for or purchasing your dream home in the Arcadia or surrounding areas, we can help with that. Brion Costa, CCIM of C-21 Adams and Barnes in Monrovia is an expert in both residential and commercial real estate in the area. He’s lived in the Arcadia area his entire life, and there is no one more qualified to help you with:
- Buying Decision – Whether To Buy Now Or Wait
- Property Location – Finding The Perfect Home
- Offer Negotiation – Writing, Presenting, and Negotiating
- Escrow Navigation – Contingencies, Inspections, Legalities
- Transition Assistance – Recommendations For Service Providers To Help With Your Move