The month of November showed continued slowing in the LA real estate market as buyers and sellers digest higher interest rates and more inventory, with properties taking longer to sell across the board. Market activity will continue to slow into the December holidays as is expected yearly. The pulse on the market appears that both buyers and sellers are in a holding pattern to see how the rest of this year unfolds and what we may have in store for Quarter 1, 2019. Review our Buyers and Sellers ADVICE section to best position yourself in this transitioning market. Don’t forget to watch our Words of Wisdom section where I challenge you to participate in a very easy experiment. Please continue sending us topics of interest so we can cover them in future newsletters. Thank you for reading!
As is expected, the real estate market has slowed down as we are now approaching the busy December Holiday season. This year however, things are quite a bit different than they were the same time last year. We are seeing inventory of properties grow by DOUBLE DIGITS in response to the general feeling that the market has slowed down, coupled with higher interest rates and the normal cooling period after a long run of price appreciation. This is what markets always do - it's usually a 10 year cycle where we see strong price appreciation with a cooling or correction period to follow. Many are concerned that the market will crash, but all the indicators are showing that we are nowhere near a crash, at least not right now. This is not at all the same market transition we saw back in 2008 and 2009. Activity is cooling, inventory will continue to rise with days on market being the highest they’ve been in a long time - but our real estate market is still relatively healthy. We will need to wait until after the first quarter of 2019 to have a better understanding of where we stand but at this moment in time - I am not seeing a crash. Still lots of buyers out there looking to purchase - but don’t expect these buyers to overpay or to fight for homes the same way they did the last few years.
ADVICE FOR SELLERS
It is more important now than it’s been in the last 8-10 years to really price your property correctly. This is no longer the sellers market many homes owners have become accustomed to. Buyers have been beat up with heavy price appreciation and higher interest rates, coupled with a lack of inventory. Inventory and days on market are starting to rise. Even if you have a very desirable property - DO NOT OVERPRICE! Buyers have access to all the property information with regards to comparables. Many won't even look at a home if they feel it’s overpriced. I know some homeowners like to list their property higher than market with the assumption that buyers will want to negotiate. It’s true that buyers will want to negotiate, but if you price too high - buyers won't even come and see your home which will be a huge detriment to your bottom line. If you are a real seller and you want to sell your home to move into another property - Price your property correctly the first time.
ADVICE FOR BUYERS
The good news is that we are getting away from the strong sellers market we’ve seen for the past several years. Inventory levels are up, providing more choices for buyers, but the costs to actually purchase a home have been on the rise since the last market crash. Many sellers are starting to get worried about the state of the market so there are a lot more opportunities today than there has been for the past 7-10 years. Make sure you have your pre-approval letter ready so if the right opportunity comes along, you can jump on it. If you were approved months ago when interest rates were lower, it would be prudent to call your lender again and get a new approval at these new interest rates. You may not qualify for the same purchase price as you did just months before. Inventory is starting to climb, but looking off market should still be a very big part of your home searching process. We have an off market searching component for every buyer we work with. Waiting for inventory on the MLS is fine, but if you want an edge, you have to look off market too.
WORDS OF WISDOM
People don’t care how much you KNOW, until they know how much you CARE.
This title was told to me by a mentor when I first got into the real estate business many years ago. Relationships are built from trust. A big part of that trust comes from making sure another person can be trusted with your emotional well being. We trust those that care how we feel. We all want to feel good but it’s hard to do it on our own - lots of negativity around us, criticism, worry…..With so much negativity constantly being thrown at us - be the positive light to those around you and help bring them up - even if you’re the one that needs to be brought up. Show some grit and push through for your fellow man/women. The fact that you are making someone else feel better by your efforts will also bring a positive feeling to you. It’s a WIN-WIN. It’s the holiday season and a great opportunity for gratefulness and change. Watch this short video and try the kindness experiment. May sound cheesy, but it’s easy and it’s proven to work!
Good news for LA buyers? The number of homes on the market is way up!
