Today, more and more I am hearing these words, “If I can’t sell, I’ll lease”. Tough minded or unrealistic sellers are deciding to become landlords rather than price a home to sell. To be fair, even if a home is priced to sell, it still may sit. In Newport Beach real estate this is true, but in Crystal Cove real estate this is especially true.
Recently, a Los Angeles Times story discussed the realities of sellers becoming a landlords. This article made me curious about our local market - what is the percentage of homes for sale vs. homes for lease? More importantly, what does it mean?
I set about looking at the number of homes on the market and homes for lease in the four major local markets: Newport Beach, Corona Del Mar, Newport Coast and Crystal Cove.
What I found was interesting:
1) Corona Del Mar, 21% of the homes on the market are for lease
2) Newport Beach, 31%
3) Newport Coast, 35%
4) Crystal Cove, 51%
When I first came up with these numbers I wasn’t sure what to make of them - I’m thinking, ok, so what? What does this mean? During a conversation with a client, we were discussing seller mentality - like so many people I speak with, posed the question, if they have it on the market, and they say, they are motivated to sell, why is it not priced to sell? I started thinking about my numbers - Ah ha! Here is a thought…in Corona Del Mar real estate, homes are selling, people want to live there and as you can see, it’s a tight rental market.
Contrast CDM with Crystal Cove real estate and you get a different picture and draw some interesting conclusions: Crystal Cove in general has well-heeled owners. Many of these folks have two, three or more homes. So, it’s safe to say, while they would like to sell, most would say they don’t “Have” to sell. They sit tight on price, telling their real estate professionals to just tell people to make an offer. The sellers have now, in mass, it seems, to have taken the attitude of well, if I can’t sell it, I’ll lease it and wait for a better day. With a whopping 51% of the homes on the market in Crystal Cove for lease the numbers appear to support the, “Wait for a better day” approach.
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Your article is so true of our south bay beaches south of LAX as well.
Lots of homeowners…with rental investments don’t have to sell so are simi motivated…the wait and see sellers meet the wait and see buyers..50% with inman saying 50% reo short sale…except not here very much. where are those wanting to sell? In escrow!
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