Attn Buyers: Be Ready To Strike
(Sellers Beware)
As summer grinds to a halt nothing is set in stone in the real estate market. It continues to be a time of volatility, especially with mortgage rates. In January this year, rates were still in the 3s, believe it or not. And then, in the blink of an eye seemingly, they shot up to the 4s and 5s, and even flirted with 6% (which they’ve done once again this week). They basically inched up week after week. However, there may be some good news on the horizon. Many in the industry feel that rates have plateaued. And even though we are by no means out of the woods just yet, the game has shifted somewhat, and, for the first time in a while, there are opportunities for buyers.
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A Complicated Market in Greater Los Angeles
Resale market conditions in the region have been all over the map—even within the same zip code, we see unpredictability and randomness. As these charts below demonstrate—depending on where you’re looking in Greater Los Angeles—the market is actually pro-buyer in some areas and pro-seller in others.
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Market Action Index
The “Market Action Index (MAI)” by Altos Research answers the question, “How’s the market?” by comparing rate of sales versus inventory.
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Greater Los Angeles – 43 MAI
Slight Seller’s Advantage
CLICK HERE to view the Los Angeles Market Report in real-time.
Comparison of Rate of Sales vs Inventory
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Beverly Hills – 28 MAI
Slight Buyer’s Advantage
CLICK HERE to view the Beverly Hills Market Report in real-time.
Comparison of Rate of Sales vs Inventory
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Mar Vista – 57 MAI
Strong Seller’s Market
CLICK HERE to view the Mar Vista Market Report in real-time.
Comparison of Rate of Sales vs Inventory
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“There could be ‘a potential silver lining’ for the market as stabilizing market rates and rising inventory ‘may bring some buyers back to the market during the second half of the year.’”
~Joel Kan, Economist, Mortgage Bankers Association
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Why Buyers Should Be Optimistic
For the entire summer, buyers had the short end of the stick. There was little to give them the confidence to pursue purchasing a home. That has changed a bit, however. There are several positive signs that indicate a shift is occurring and with proper planning and strategy, opportunities abound. Here’s why…
01 Buyer Demand Has Slowed
No one enjoys a bidding war, aside from sellers, of course. But the days of buyers facing endless competition from counter offers appear to be behind us. As demand has slowed due to market conditions, there are fewer buyers in the pool fighting for the same scraps…which is a good thing.
02 House Values Have Come Down
Sellers have had a great run the past few months, jacking home prices well above their true market value. After all, they held all the cards and there was little reason not to elevate home pricing. Why? Because demand was high. Now it has begun to wane giving buyers cause for optimism.
03 Housing Inventory Is Up
Well, it is definitely on an upswing, at least. In a year in which homes were in scarce supply, sellers had all the leverage. But as new statistics indicate, more new homes and resales are coming back on the market and that signals a great opportunity for buyers—particularly buyers who are strategic and focused.
Do You Have A Strategy?
Whether you are a buyer or a seller, it is key to work with a real estate expert who not only understands the complicated, ever-shifting dynamics of the market but also your very specific needs. Buying or selling a home is a huge decision—it’s very likely your biggest investment. Make sure you know exactly what the realities and opportunities are so you can make an informed decision you’ll feel good about.
Be well,
Charles