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Real Estate Newsletter

AUGUST NEWSLETTER

Dear Friends and Colleagues,

The Los Angeles Real estate market broke another record!  In Los Angeles County, the median home price rose 18.7% to a record $795,000 in July.   We are seeing record highs in pricing, but real chatter continues to get louder about a market cooling.  Interest rates are holding steady right around 3% and equities are also breaking records this month!  Make sure to read our Market Update to learn the current state of affairs.  We will continue to stay on top of the stats and lead indicators to help forecast what may be coming up. Review our Buyers and Sellers ADVICE section to best position yourself in this transitioning market.  Please continue sending us topics of interest so we can cover them in future newsletters. Thank you for reading!

MONTHLY UPDATE

The LA real estate market continues to climb as statistics show July broke another price record.  The six-county region’s median sales price rose 17.5% from July 2020 to a record $681,750 last month, according to data released by data firm DQ News.  This would be the 12th straight month of double-digit median home price rises.   Sales also increased 10% compared to last year.

Specifically in Los Angeles County,  the median home price rose 18.7% to a record $795,000 in July, while sales climbed 20.2% compared to last year.  

It's important to note that the pace of this increase has slowed down as many buyers are coming across affordability issues while also growing tired of the limited inventory and constant bidding wars.   
New home construction properties are still in high demand along with nicely remodeled homes with ample outdoor space. Covid has really changed the wants and needs of today's buyers as most are really looking for outdoor space.  

It's true that the market continues to climb, but the rate of this appreciation is showing signs of slowing.  It's important to remember that we are still in the midst of a global pandemic.  The dust has yet to settle on the ramifications of all this Government "free" money, Landlords will be soon chasing past due tenants after the moratorium is completely lifted and the true unemployment rate is unclear as many workers have opted to stay home instead of go back to work.  Employers are having a very difficult time finding good help now as many workers prefer to not work and continue to utilize the temporary government programs for income.  

As the rental moratorium will be lifted soon (September 30, 2021), we are seeing a strong increase in demand for rentals.  During the heights of covid, many landlords were forced to reduce rental rates and even offer free months to entice the very limited tenant pool to sign a lease.  The rental market is very different now and we anticipate rental prices should start to appreciate quickly back to pre-covid prices and beyond when the moratorium is lifted for good.    

Seasonally speaking, we are now in the less active time of the market.  Most students are back to school, with a mix of in person and zoom learning.  Schools are a major factor for purchasing a home so many parents want to have that settled before the school year starts.  We expect inventory levels to fall as we approach the holiday season - which is normal during this time of year.   

The stock market also broke another record in August - while interest rates still hover near 3%, no change from last month.  The unemployment rate declined in the month of July down to 5.4% from 5.9% in June.  

Los Angeles is a city of its own.  The demand to live here will always be high - but the market is showing signs of slowing as we start to prepare for the holiday season.  No one really knows where the market is going but many feel that prices are near their tops and a correction may be coming.  Only time will tell.....

ADVICE FOR SELLERS

Sellers are still in the driver's seat of this market as inventory levels and interest rates stay low.  Buyer demand is still high, but many buyers are being pushed out because of affordability issues.  
Properties that are move-in ready with good outdoor space are usually selling the fastest in this market.       

We are seeing that more and more sellers are OVERPRICING their properties to try and hit a "home run" in this market.  This is evident by all the price reductions we are seeing.  Pricing is a very important aspect of the marketing plan so make sure you are pricing correctly with respect to the comparables and your strategy.  Buyers are very savvy in this market and they have access to all the information.   Overpricing in a market like this will usually cause your property to sit and ultimately sell for less than if you priced it correctly the first time.  On the other hand - if you're one of the higher valued homes in your zip code, pricing high maybe a proper strategy but you may need to be patient for that right buyer to come along.     

If you're in the entry-level or median range price range in your zip code and haven't received an offer in the first 30-45 days, you should definitely do a new pricing analysis to see how your asking price compares to the market.
  
Contact us to learn more about pricing and how we can help you get your home looking its best and sold for top dollar!  

ADVICE FOR BUYERS

We are seeing some slowing in various market segments in Los Angeles.     
New and remodeled homes are still selling for the most money and quickly.  There are new loan programs out there for business owners who make a lot of money each month, but have less than ideal tax returns.  The rate is a little higher than what the big banks offer - but it does get you into a home and you can refinance when your taxes look more appropriate for those prime lower interest rates.  

The biggest opportunity for buyers to purchase at fair market value or less is to review homes that have been on the market for 60 days or more without a price reduction.  A lot of sellers think their home will get multiples or sell quickly in today's crazy market - but that's not the case with all homes.  

Off Market Opportunities are still one of the best ways to find a home in a limited inventory environment like this.  A large percentage of our deals this year have been OFF MARKET.  There are lots of sellers out there - they are just NOT on the MLS.  

Contact us to learn more about our current Off Market Opportunities and how our Process has helped many buyers find their dream home in this competitive market!