For most of the last decade we’ve known Los Angeles as a seller’s market, but things are changing. Home prices seem to have leveled off and the number of sales is below the historical average. However, the price reductions I’m seeing feel far more related to sellers still hoping to push the market and getting a resounding “no” back, than an impending big market drop. The market overall has definitely slowed down, with some pockets being the exception. I’m also noticing far more properties go in and out of escrow as buyers are getting pickier and pulling out when something else catches their eye, or not running their numbers carefully enough before getting under contract and having a change of heart.
Housing affordability hit a ten year low in 2018 for Los Angeles and a lot of buyers are finding themselves priced out of the home they want in the area they want. Even interest rates dropping dramatically at the end of 2018 didn’t push some buyers forward. The forecast has rates rising to close to 5.5% for the coming year, but many are predicting it won’t be quite that high but still could top 5%.
Either way the consensus seems to be that rising interest rates are on the horizon. If you’re a buyer right now, it might be worth locking in a rate in the 4’s while you can. It’s still a seller’s market if you have a good property, especially for those in really great condition or priced to entice.
Pricing to attract multiple buyers remains the best strategy, coupled with a rock solid marketing plan…with fewer buyers out there it pays to get your home in front of as many of them as possible and get them through your doors before they check out your competition!