If you’ve been holding out for the housing market to drop, the window of opportunity has closed. The market experienced a brief dip that hit its lowest point in November 2022. However, since then, we’ve witnessed a strong rebound, even with higher mortgage rates, making it a bit more challenging for buyers to qualify. The demand continues to surpass the available inventory, leading to fierce competition, especially for well-priced properties that receive multiple offers.
Let’s delve into the numbers for San Fernando Valley Single Family Dwellings:
June 2022
- Median Sales Price: $1,100,000
- Active Inventory: 1,716
June 2023
- Median Sales Price: $1,000,000
- Active Inventory: 1,137
November 2022
- Median Sales Price: $900,000
It’s evident that there was an 18% price drop from June to November 2022. However, the market has since made an impressive recovery, with prices currently up by 10% and still on the rise. By year-end, I expect to see positive year-over-year price growth.
Buyers are adapting to the higher interest rates. While there were previous inquiries about securing 3% mortgage rates, the focus has now shifted to closing purchases with prevailing market rates and considering future refinancing options. This approach seems to be the wisest strategy, as waiting for rates to decrease while property values continue to soar could lead to potential losses for buyers.
One of the reasons contributing to the low inventory is the lag in new construction compared to the pace of housing formations. Additionally, existing homeowners with historically low mortgage rates find it hard to commit to purchasing at the current higher rates, further constraining the available housing supply.
Despite the challenges, over time there can be compelling reasons for existing homeowners to sell and relocate, especially when rates come back into the 5% range.
The presence of various government down payment assistance programs for first-time buyers adds to the pool of potential buyers and contributes to the ongoing rise in property valuations.
Homeownership has long been recognized as the primary means for the general population to build wealth over time. In contrast, paying rent is not a constructive economic plan.
As we move forward in 2023, the San Fernando Valley housing market remains a competitive arena. Buyers should carefully weigh their options and consider their long-term investment goals while sellers should consult with with me on how to best navigate this dynamic landscape.
If you are in the Los Angeles area, and 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
Leave a Reply