If you’ve been paying attention to the Southern California Real Estate market in recent months, you might have noticed a couple things. The first being ridiculously high home prices (up 20% YOY in some cities) and the second being a lack of options in the market i.e. low inventory. This has been the story of the real estate market in 2018 and it seems it will continue being the narrative through the end of the year. However, various real estate professionals, ourselves included, have noticed a slight change in the market that may very well be an indicator as to the direction of the market come next year. The real estate market has hit a wall in various counties (in reference to price point) and we are now beginning to see that lots of major markets are experiencing modest increases in levels of inventory compared to the same time last year. This has also been the case in Los Angeles, Orange, Ventura and San Bernardino Counties in Southern California.
So what exactly does this mean for prospective buyers and sellers? Well, if you’re a buyer, this is great news! If you’ve been searching for a home to buy this year, then you know just how unforgiving it has been. Multiple offers pushing home prices above list, rising interest rates, and stagnant income levels pricing out many well-qualified and motivated home buyers. Sound familiar? Well the good news is that with the increased rate of homes coming out on the market more frequently, home buyers should feel a renewed sense of opportunity in that there will be more options to choose from and less competition when it comes to finding and writing offers on properties. If you’ve been patiently waiting for the market to shift, your patience is paying off. Hang in there and you’ll be a Southern California homeowner soon.
Tip for Home Buyers – When searching for a home in Southern California, find a property that can be rented out for at least what the monthly mortgage payment will be. This way, in case of less than ideal circumstances such as possible job relocation/loss, illness, or any other curveballs life tosses your way, you can be certain that you can still make the payments on your new home. Southern California rents have increased as well and this may help take the sting out of any unforeseen life circumstances. As a potential home seller, this news may not be particularly exciting to hear. But, if you are looking to sell your home, it would behoove you to get into the market sooner rather than later. Inventory levels, while rising, are still low in the grand scheme of things. However, with more homes coming out on market, correctly pricing your home is imperative. Already we’ve noticed more price reductions as well as homes taking more days on market to sell. As a home seller, you want to attract as much attention to your property as possible, and to stand out from the rest of the competition. Competitive pricing strategies are one of the most important ways to cultivate that interest, especially with the current trends in the real estate market. In other words, don’t chase the market. Ready yourself to sell, list within the market, reap bountifully and move on to the next chapter in your life. Don’t get caught behind the eight ball.
Tip for Home Sellers – If you absolutely need to sell your house this year, price ahead of the market. In other words, price your property in a way that is conducive to where the market is heading. You don’t want to end up in a position where it is a necessity that you sell, but you’re leaving your property listed too highly priced in a depreciating market. We are available to talk through some of these strategies with you. If you are interested in learning more about buying and selling real estate in the last quarter of 2018 and into 2019, we are available seven days a week. Feel free to reach out to us.