After the California real estate market cooling off for a couple of months, the market stays heated with only 1.6 months of inventory. The 30-year mortgage rates are a little higher, but still historically low. The number of home sales is lower, primarily as a result of the low inventory, but we can’t ignore the drop in affordability. Only 26% of recent sales are to first-time home buyers. Historically it’s around 40%. A first-time buyer generally has a low down payment, and can’t compete in multiple offer scenarios against buyers with a low loan to value, or all-cash offers. Even if a first-time buyer wanted to compete in price, they can’t make up the difference in a lower than negotiated purchase price appraisal. We need the first-time buyers accumulating properties and equity for a stable economy. Going into the new year we should see a seasonal uptick in inventory, but the demand is still strong. We may not see the same appreciation in values as we did in 2021, but it’ll still be around 10%. We’ll have to see how interest rates react through the year as the Fed removes the Quantitative Easing and starts to push up the Fed Funds Rate from 0. The Fed is reacting to high inflation levels, a strong employment picture, but an ongoing COVID issue.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, SRES, SFR, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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