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Still on the market

Not everything sells like hotcakes in today's market. Some homes stay unsold longer for a variety of reasons, but most often the price is too high.

September 21, 2003|Allison B. Cohen | Special to The Times

Even though most homes for sale are being snatched up, there are always some that seem to languish.

"Houses are going in weeks if not days," said Randy Spalding, a manager at Gilleran Griffin Realtors in Westwood, "and if they're not, they are overpriced in a hot market like this."

The vast majority of homes have sold quickly for the last year and a half. Since January of this year, the average has been about 25 days in Los Angeles County and 23 days in Orange County. In 1993, the time a home sat on the market in the two counties was about three months.

Homes taking longer to sell, experts agree, are priced unrealistically; have a problem, such as a busy location; or are perceived by buyers as having something wrong because they didn't sell right away.

Trying to ride the wave of incredible appreciation that Southern California has enjoyed the last few years, some real estate agents and sellers simply price homes too high, according to California Assn. of Realtors President Toby Bradley. Median home prices as of July for the region were up 21.6% from August 2002, according to DataQuick Information Systems. That's on top of double-digit increases in median home prices across all counties from the end of 2001 to the end of 2002.

And although home values are continuing to rise, they may not be going up as quickly as sellers anticipate.

"I absolutely think that people are searching for the best price they can get and sometimes overshooting the market," Bradley said, "but they are getting carried away because the rate of appreciation we are having is starting to slow down."

Still, there are those who try to push the market anyway. "Some Realtors are taking listings $30,000 and $40,000 above the market, inflating the price," said Ken Sampson of Coldwell Banker Properties, Porter Ranch. "They are saying the market will catch up to me or I can get the seller to go down."

Others feel over-inflated prices are about greed.

"This market is bringing out the worst in a lot of people," said Joseph La Croix, a real estate agent at Boardwalk Realty in Marina del Rey. "Some people think in this market, crazy prices still fly. I'm trying to tell them that's just not so."

La Croix knows firsthand.

He and a client recently parted ways after the Venice home they had listed in May remained unsold.

The house, a two-bedroom, one-bath traditional, was priced at $795,000. After four months on the market, La Croix said, they received only one offer on the property -- about $35,000 below the listing price.

La Croix thought the offer was good enough to take. But the seller refused, hoping to get the full asking price.

"They would have netted $200,000 after all costs," La Croix said, "and that wasn't enough for them."

Manuel Solakian, with DiBeck GMAC, Glendale, has a $410,000 listing in Reseda he believes is overpriced. The property has been on the market since March.

"It's worth $370,000, max," Solakian said of the three-bedroom, two-bath home. "The seller is playing the market to see if someone will pay more than the property is worth."

Solakian, a real estate agent for 21 years, points to a comparable home that sold on the same street for $330,000. "Eighteen offers in three days," he said.

Other homes stay on the market because of problem locations. These properties have what agents call "an incurable defect," such as being on a major thoroughfare or in an undesirable neighborhood.

Such is the case with one of Mike Pymm's listings: a 3,000-square-foot, two-story, three-bedroom Spanish-style home on busy Crescent Heights Boulevard between Beverly and Santa Monica boulevards. The house has many positives: 12-foot ceilings, hardwood floors, original details -- even a separate mother-in-law apartment.

It was initially listed at $999,000 in February, but after 21 open houses and some low-ball offers in the $750,000 range, it still has not sold. The price now has been reduced to $899,500.

"It's not critical for the owner to sell," said Pymm, an agent with Bankers Realty in Beverly Hills. "The owner feels the house is worth what he is asking for and it's just a matter of finding the right person."

The owner, Bill Spero, 77, a longtime investor in real estate properties and stocks, said he sees the market as an opportunity.

"I think there is money to be made in real estate, even with this house priced as high as it is," Spero said. "I think prices are ludicrous, but they are doing nothing but going up."

Spero said he believes the home has not sold because it is larger than other houses in the neighborhood or because of the hand-painted cabinets in the kitchen, which some lookers have commented on negatively. Whatever the case, Spero isn't budging.

"I am keeping it on the market indefinitely," he said. "If I were to reduce it, it wouldn't be by much."

Even with a slight reduction, first-time home buyers Nicholas Pollack and wife Natasha, both 38, who have looked at the house, said they wouldn't be interested.

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