Q: What is the current state of the real estate market?
A: I am happy to report that the State of our Market is strong and the outlook has improved greatly since our summer report. At that time, rising interest rates contributed to the already pressing affordability issues, forcing many buyers to the sidelines. We saw some price corrections, further driven by the significant increase in inventory. Overall, we did not truly see a drop in home values as median sales prices throughout Los Angeles County continued to rise on a year to year comparison. Of course, each property is unique and there are some that needed to sell their property during this time and will fervently insist that they lost money, believing they were entitled to the previous peak pricing. Let me provide another point of view.
Home prices had been, since 2012, rising at unsustainable rates and without reason. Think of a stock where excitement or speculation suddenly drives up the price. You will often hear experts in that field decrying that the company revenues simply do not support the stock price. The “dot-com” crash was an extreme example of this. Investor money was being thrown at every new internet-based corporation as the businesses of the future, even though many had not found a way to even monetize their companies. It seems that we have been looking at ads on our computer always, but we haven’t. At that time, ad revenue was not the force it has since become. The stocks were valued at high prices merely because those were the prices that buyers were willing to pay to get in the game, with no concrete rationale for the escalation, no increase in return on investment. That’s where we found ourselves, to a much less dramatic extent, in spring of 2018. After six years of rabid price increases with little to no increase in buyer wages, and the cost of mortgage money risen, it was critical for the long-term health of our real estate market that it correct and stabilize. So, we had a pause that really was not too painful.
Much has changed in the second half of 2019, and it’s for the better. Fears of recession have dissipated in favor of more positive projections for 2020. Sellers adjusted their expectations in pricing- this is key. Interest rates fell and are currently at their lowest in three years, and buyers have noticed the opportunity, snapping up properties at year end. There is no longer an excess of inventory and throughout California there has been an overall benefit, with average days on the market down from this same time last year. According to the California Association of Realtors, the month of November brought California its greatest year-to-year increase in home prices in the past year and a half. People that believe you can only sell in spring- take note. This winter we are seeing a much stronger market than we had last spring, and as a seller, you can benefit from taking advantage of the lower inventory that typically rolls out in spring.
How are we doing locally? Here are statistics for our local neighborhoods, (single family and condo sales combined), per the MLS (remember, these are median numbers):
Marina del Rey– While some buyer opportunities were definitely out there, from this time last year, sales prices still rose! Single family home prices up by 10.8% and condo prices rose a respectable 3.6%. Notably, the number of days on market to sell drastically declined by 78.9%!
Venice– Single family home prices rose by 3.6%, condos rose 30.3%. Days on market dropped by 42.9%.
Westchester– Single family home prices rose by 9.6%, condos rose 71.6%! Days on market dropped by 11.8%.
Culver City– Single family home prices rose by 8.4%, condo prices were down by 7.1%. Days on market dropped by 11.8%. Fun fact: Rents in this area rose 27% from previous year, with a median of $4000 per month.
To get the best picture, you really need a personalized analysis of your property, including condition, neighborhood, and price range. (These statistics are for the entire MLS area referenced, and your sub-neighborhood may be different. Contact me any time for more specific statistics for your particular property.)
Disclaimer: This article is intended to be primarily for entertainment purposes and is not to be considered legal advice.
ABOUT LISA PHILLIPS, ESQ./ CA Dept. of Real Estate Broker License #01189413
Lisa Phillips is a Realtor in the Los Angeles area, with close to 25 years as a real estate broker and attorney and is a Broker-Associate at Lotus Estate Properties in Marina del Rey. Lisa is a member of the National Association of Realtors “Green Resource Council” and achieved its “GREEN” Designation. In addition to her real estate and business savvy, Lisa is passionate about helping others, actively volunteering in the community and donating a percentage of all sales commissions to charity. For more information, please email [email protected]