As a Realtor in the dynamic Los Angeles real estate market, it's important to stay informed about both local market trends and broader industry changes that can affect buyers and sellers. For Pico-Robertson, 90035, the month of August 2024 revealed some compelling statistics. The absorption rate was 56%, a strong indicator that homes are selling quickly in this popular neighborhood. With 16 active listings and 9 homes sold, Pico-Robertson is seeing continued demand, making it a favorable time for sellers.

The average sales price came in at a substantial $2,495,000, reflecting the desirability and high value of homes in this community. Additionally, homes averaged 28 days on the market (DOM), meaning properties are moving fast.

What Does the 56% Absorption Rate Indicate?

An absorption rate of 56% signals a seller’s market, where demand is outpacing supply. Here’s what this number means for both buyers and sellers:

• Seller’s Advantage: With over half of the available homes sold in August, sellers have more leverage in negotiations. This heightened demand allows sellers to list their homes confidently, often receiving strong offers within a short time frame.
• Buyer Competition: For buyers, the high absorption rate means they need to act quickly. Well-priced homes are not staying on the market long, so buyers should be prepared to make swift decisions and competitive offers to secure their desired property.

How the New NAR Commission Law is Changing the Landscape

While the real estate market in Pico-Robertson remains competitive, recent changes to the commission structure, as mandated by the National Association of Realtors (NAR), are reshaping the dynamics of buying and selling homes.

The new NAR law now requires greater transparency in how commissions are disclosed and negotiated. This change directly impacts the way buyers and sellers approach transactions, particularly around the responsibility for paying the buyer’s agent commission.

Traditionally, the seller paid both their agent’s and the buyer’s agent’s commission, typically around 5-6% of the sale price. However, under this new structure, buyers are now more involved in negotiating and potentially paying for their own agent’s commission. Let’s take a look at how this could play out.

Effects on Buyers and Sellers

1. Increased Buyer Awareness: Since buyers are now more likely to directly negotiate or cover their agent’s commission, they may become more discerning about agent fees. Buyers will likely look for agents who can offer clear value, which could lead to a more competitive market for real estate professionals.

2. Pressure on Buyer’s Agents: Buyer’s agents may face pressure to lower their fees or provide additional services to justify their commission. In competitive markets like Pico-Robertson, where buyers are already facing high home prices, agents need to be prepared to demonstrate the value they bring to the table.

3. Potential Impact on Home Prices: In some cases, buyers may attempt to negotiate with sellers to offset the cost of the buyer’s agent commission. However, in a market with a 56% absorption rate, where homes are moving quickly, sellers may have little incentive to offer such concessions.

4. More Negotiation in Transactions: With commissions now a more visible part of the negotiation, both buyers and sellers will need to navigate these discussions carefully. Sellers may need to adjust their expectations, while buyers will need to plan for additional costs upfront.

The Bottom Line for Pico-Robertson

For sellers, the current market conditions in Pico-Robertson make this an excellent time to list a property. With a high absorption rate, low DOM, and a median sales price of nearly $2.5 million, sellers can expect a favorable environment.

For buyers, it’s critical to be prepared for competition. With homes selling in just 28 days on average, buyers need to act fast and consider how the new commission structure affects their overall budget. Working with an agent who understands the local market and the intricacies of the new NAR law will be key to navigating the fast-paced environment in Pico-Robertson.

Have questions about the absorption rate or how the commission law may affect your real estate decisions? Feel free to reach out—I’m here to help guide you through these market shifts and ensure your transaction is as smooth as possible.

Nathan Derry
Realtor, JohnHart Real Estate

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

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