Pasadena’s red-hot housing market is fueling intense bidding wars and increasing home prices. Frenzied buyers routinely pay hundreds of thousands of dollars over the asking price as demand far outpaces supply. The rising mortgage rates and record-low inventory drive buyers to seek scarce listings. Pasadena real estate agent Garrett Chan says the intensity of the competition in Pasadena signals an overheated market nearing its peak:
Low inventory driving up prices
One major factor pushing Pasadena home prices upward is the lack of homes for sale. Inventory has been extremely tight, with fewer homes on the market than the number of interested buyers. This dynamic of low supply and high demand allows sellers to command top dollar for their properties. Homes are frequently receiving multiple offers well above the asking price.
Limited new construction
Pasadena’s limited space for new construction and vacant land make it challenging to build new housing, resulting in a tight supply of homes and increasing prices. Pasadena also has strict regulations on development. Zoning laws limit opportunities for densification. Constructing accessory dwelling units (ADUs) takes time and money, making it challenging to add housing inventory quickly. The increasing population and stagnant new construction have led to a supply squeeze, allowing sellers to increase prices.
Buying a home in Pasadena: Influx of cash buyers
All-cash buyers are flooding the Pasadena market. These buyers are less contingent on financing and can make aggressive offers well above asking prices. First-time homebuyers trying to purchase with a mortgage struggle to compete. Many of these cash buyers are investors and corporations looking to buy properties and convert them to rentals. Others are affluent professionals relocating from expensive areas like San Francisco and New York. This influx of buyers with extensive financial resources gives sellers the confidence to hold out for top-tier offers.
Skyrocketing home values
The median home price in Pasadena has experienced meteoric growth over the last few years. As of 2023, Pasadena home values increased by 23.8%, according to Zillow. Some luxury homes are selling for double or triple their asking prices. The rising home values are pricing many prospective buyers out of the market entirely. The intense competition requires buyers to cast a wide net, act quickly on listings, and expect bidding wars if they hope to purchase a home. The rapid price acceleration for buyers on a budget makes homeownership in Pasadena increasingly tricky.
Pasadena real estate
Pasadena is a city in Los Angeles County known for its historic homes, architecture, and proximity to major cultural institutions. The real estate market in Pasadena is driven by its desirable location near Los Angeles and amenities like the Rose Bowl. The area appeals to professionals looking for easy access to LA. Pasadena real estate is characterized by charming, older homes at premium prices.
Luxury homes in Pasadena
Pasadena is home to some of the most luxurious residences in Southern California. Large mansions with columns and porticos overlook manicured lawns and gardens. Gated driveways lead to grand foyers with marble floors. State-of-the-art kitchens have top-of-the-line appliances and marble countertops. Master suites have fireplaces, spa-like bathrooms, and walk-in closets. Many homes have pools, home theaters, wine cellars, and home gyms. The multi-million dollar homes epitomize luxury living in the elegant neighborhoods of Pasadena.
