Great article from today's (6/17/07) L.A Times Real Estate Section

This is very reflective of what we've been seeing:
It's the new normal
Sellers try for the right price off the bat, while buyers take their time deciding.
By Diane Wedner, Times Staff WriterJune 17, 2007
ON a recent Sunday, Bob and Jane Baker practically tiptoed across the hardwood floor of a newly refurbished Sherman Oaks home, looking a bit sheepish about bringing their Italian greyhound to the open house. They needn't have worried about Digby being an unwelcome visitor, however. Just about anything goes today, as agents vie to get potential buyers into homes for sale."A couple years ago, a house situated next to an alley, with 16 additions, could sell without an open house," said Keith J. Fisher, associate manager of Prudential California Realty in Sherman Oaks. "Now, it's sitting there for half a year. Open houses can make a difference, especially for new listings."Open houses, staging, upgrades and seller concessions — they all help speed home sales. Still, the No. 1 selling tool is setting the right price, agents say. The three figures people look at are the comparables, which agents give clients to show what prices their neighbors got; the county appraiser's price; and the price buyers are willing to pay, said Tracy Malone, a ZipRealty Inc. district director for San Bernardino and Riverside counties. "The last one is the only one that counts."More and more, sellers are getting it.The Bakers and a dozen other potential buyers checked out every corner of the pristine 4,471-square-foot, five-bedroom Sherman Oaks house with a modern kitchen, built-ins and a pool. It's located in a red-hot part of the San Fernando Valley and well-priced at $1.69 million. Coldwell Banker listing agent Shea Crofoot said she's already negotiating an offer in that ballpark.Overall, prices in the Southland rose 4.7% in May from a year ago to a median of $505,000, which reflects gains in L.A. County but masks declines in Riverside, San Diego and Ventura counties. In Los Angeles County, the median price — the point at which half the homes sold for more and half sold for less — rose 6.8% to $550,000 in May from the same month the previous year, according to DataQuick Information Systems. Orange County's median was $635,000, virtually unchanged from a year ago.The number of homes sold across Southern California was down by about one-third, benefiting buyers, who can choose from a vastly larger inventory of properties for sale. They also are enjoying the ability to look at a house, walk away, compare it with others and return a week later to make an offer. By a widely used measure of inventory, there has been an average 8.3-month supply of homes on the market in Los Angeles County over the last 19 years, according to the California Assn. of Realtors. That's how long it would take for the supply of homes to be exhausted at the prevailing sales pace. In April, that supply was 12.1 months in L.A. County and 22 months in Orange County. The San Fernando Valley, for example, had 5,680 single-family homes, condos and town houses — a 5.2-month supply — listed for sale at the end of March, compared with 1,492, or a one-month supply, for the same period in 2004, according to the Southland Regional Assn. of Realtors. John Gillette, a Dyson & Dyson agent in La Quinta, said properties in the high desert are sitting on the market for an average of 200 days.James Joseph, owner of Century 21 Ambassador in Whittier, said his office checks comps frequently for neighborhoods in which it has listings, and urges clients to adjust prices accordingly. "People need to look at their homes like they do Motorola stock. You throw it on the market, and the market will give it the thumbs up or down," Joseph said. "You get what the market will bear."To gain an edge, some sellers are offering concessions to buyers: paying loan points, helping with closing costs, paying the first year's homeowners association fees and extending one-year warranties. Even with that help, some first-time buyers are having to get creative, as median prices are still stratospheric and banks have tightened lending standards in the sub-prime market.Alexis Desanti, a 57-year-old legal secretary and West Hollywood renter, began searching for a Long Beach condo in the $250,000 range in March. The first-time buyer, who was nervous about her meager down payment, looked at about 30 units before buying a 700-square-foot, one-bedroom condo within walking distance of the beach, for $258,000. To qualify financially, Desanti got a $15,000 down-payment grant from a first-time-buyers program sponsored by the Pacific West Assn. of Realtors. Opening Doors participants must purchase a home priced at less than $564,264 in Los Angeles County, their incomes must not exceed $97,320 and they must contribute 1% of the sales price toward the down payment. As long as Desanti lives in the home for the first three years, the grant will be forgiven.Desanti also qualified for a 40-year loan at 5.75%. She pays interest only for the first 10 years. "I thought I never had enough money or the right job or the right location to buy," Desanti said. "I finally realized the market was right now. Or I would never get in."