Lakeside Real Estate Wrap-Up: Small Supply and Rising Prices

By Nikki Coppa

Lakeside has jumped to a 12 percent overall gain in sale price over 2012 year to date (YTD). This significant improvement from last month falls just short of the 13 percent overall gain in East County and the 18 percent increase throughout San Diego County. The highest sale reported YTD in Lakeside remains at a healthy $825,000. The attached property sale price gain of 25 percent exceeds not only the San Diego County average number at 24 percent, but all other individual East County community gains as well.

Current active inventory mix features an increasing number of traditional sales at 85 percent, foreclosures at 9 percent and short sales at 6 percent. The dominance of traditional sales is welcome news for buyers as the traditional sale process typically results in faster seller response times to offers and more reliable closing timeframes. As is the case throughout the county, attached home inventory is in the shortest supply in Lakeside at only a 12 day supply. With prices on the rise, these conditions favor move-up buyers looking to sell their condos or townhomes in favor of larger, detached homes.

In most areas, average sale price is increasing because of the inventory shortage, not high end property sales.

At the moment, when a property comes to market, there are at least 10 offers in the first 48-72 hours. If a property is listed for $350,000, buyers offer higher and higher. The seller accepts the highest offer (most often), let’s say that is $400,00. Then the appraisal comes in at $340,000 and the buyer expects the seller to drop the price down to $340,000. The smart listing agents are advising their sellers to eliminate the appraisal contingency in the contract and ask for proof of funds for to pay the difference between the price they offered and the appraisal price. On the example above, this means that the buyer would obtain a loan based on $340,000 and bring an extra $60,000 to close escrow.

Why would a buyer do this? Basically, if they don't, they'll have to compete for the next home listed, and it will likely sell for more than the previous home. If the buyer doesn’t throw the cash in now, they will likely pay more for the next one that comes to market.

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