It’s all about supply and demand. The inventory of housing stock in the San Fernando Valley is increasing. The tricky part is so are interest rates. What we’ve experienced over the past few years has been an unhealthy real estate market. The Gov’t artificially lowering interest rates to offset the negative effects of closing the economy because of a pandemic, but without the inventory of the product (houses), to satisfy the number of consumers.
I’ve covered in previous blogs on how the constuction of housing hasn’t kept up with population growth. Even with the state government attempting to override local zoning laws to create more housing units, we’ll be in a shortage for several years. Higher interest rates will set aside marginal buyers, and housing price increases will moderate.
Those that are screaming out that we’re going to have a glut of foreclosures are wrong. This is not 2006. 38% of properties are owned outright. We have the highest amount of housing equity in place ever.
Foreclosures will go up, but from historically low amounts, partially created because of government forced foreclosure moratoriums. There will always be foreclosures for various reasons. If owners have personal finance issues, 99% of the time they can sell and still have equity in their pocket. Sometimes people can’t get out of their own way. For those… sorry… the market can absorb the foreclosures without an issue.
I’m going to blog on this soon, but sellers and agents will have to start to be more strategic with pricing and staging a property to be more competitive. Over the past few years there’s been no inventory, so sellers have been getting excessive prices, just by being available.
Many potential sellers will be apprehensive to sell, as they’ll already have a much lower interest rate mortgage in place than what they’ll have on a new purchase.
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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