The housing market is shifting before our eyes. National headlines say there's a housing market crash. They are recession fears, the Fed keeps raising interest rates and the stock and cypto markets have lost a lot of value. Well that's a lot to digest! We all have to remember that real estate is highly localized and even here in LA we are experiencing wildly different markets.
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1 - Buyers need to rerun numbers as mortgage rates rise - with rates changing daily, and projected to go up, your purchasing power can change from one day to the next. Don't go falling in love with a home you couldn't afford in the first place.
2 - Inventory shortages will continue - Demand continues to outweigh the supply. I don't anticipate a wave of inventory or foreclosures to hit the market just a slight increase in inventory.
3 - Cancellations - We're seeing a high amount of cancellations which is bringing more properties back to market. This will give buyers a slight bump in choices and help flatten prices.
4 - Home prices will continue to remain high - With Low inventory and inflation, it's unlikely house prices will drop that much. I expect appreciation to flatten and for some areas of LA to decline in value. There will not be a HOUSING CRASH!
5 - Prepare for high prices on suburban homes - Buyers should realize suburban home prices have outpaced downtown/urban center home prices.
6 - Some buyers may want to consider a 5-year ARM - Adjustable Rate Mortgages have lower interest rates. A 5-year ARM is just 3.90% compared to an average rate of 5.54% for a 30-year fixed mortgage.