San Fernando Valley Real Estate Market Update March 2024

The mortgage rates have had gyrations over the past few months, presently just under 7% for the 30-year fixed. The buyer base is getting accustomed to the higher rates, but rates still affect the affordability,  especially when paired with the property values going up.

In a normal housing economic environment, the housing prices would be going down. Since the inventory is still tight relative to the motivated buyer base, multiple offers are still happening and driving prices up.

First-time buyers are still in the back seat if they’re caught up in multiple offers with buyers with more attractive financial capabilities. They have to have their financial act together, and excellent representation in negotiations.

The latest national buyer percentages:
First Time Buyers 26%
Cash Buyers 33%
Investors 21%¹
20% sold over list price

Real estate is very regional. The proverb Location, Location, Location is very real. The San Fernando Valley inventory is still tight and pricing appreciating, but some areas like Austin and Phoenix which were hot when the Pandemic allowed many to relocate and work remotely, are presently seeing pricing drop. A main factor in housing cost is land and new construction availability. When land is plentiful and development costs lower, over time housing costs are more stable.  

In areas like the San Fernando Valley land viable to new housing development is minimal, permitting and tax costs, environmental and gov’t restrictions, and the longer development timeframe make it more difficult to develop new housing stock. The local and state government is pushing an expedited system in place for low-income high-density housing development, and it should accommodate lower rents over time. Single-family housing with good-sized lots will retain value.

Generationally some generations are hitting prime buying ages. That will put additional buying pressure in place while Baby Boomers stay in place with the artificially low mortgage rates realized a few years ago. 

Here’s a breakdown of different generations and how they tend to approach home buying presently:

1. Silent Generation (born 1928-1945):
   • Many are now retired or nearing retirement.
   • They may be downsizing their homes or looking for properties with age-friendly features.
   • They often prioritize stability and may prefer traditional home-buying methods over online options.
2. Baby Boomers (born 1946-1964):
   • Boomers are a diverse group, with some nearing retirement and others still in the workforce.
   • Many are empty nesters or soon will be, so they might be downsizing or looking for homes in retirement communities.
   • They may prioritize amenities like single-story living, accessible design, and proximity to healthcare facilities.
3. Generation X (born 1965-1980):
   • Gen Xers are typically in their 40s and 50s, balancing careers and family life.
   • They may be looking for larger homes to accommodate growing families or upgrading to nicer neighborhoods.
   • They are likely to value stability and homeownership but also prioritize work-life balance and convenience.
4. Millennials or Gen Y (born 1981-1996):
   • Millennials are now in their mid-20s to late 30s, reaching prime home-buying age.
   • Many are first-time homebuyers, looking for starter homes or condos.
   • They value affordability, sustainability, and technology integration in homes.
   • They may rely heavily on online resources and social media for home searching and prefer digital transactions.
5. Generation Z or Zoomers (born 1997-2012):
   • The oldest members of Gen Z are entering adulthood and starting to consider homeownership.
   • They are highly tech-savvy and value convenience and efficiency.
   • They may prioritize eco-friendly features and smart home technology.
   • Like Millennials, they are likely to rely on online resources for home buying and prefer virtual tours and digital transactions.

Each generation has its own unique characteristics and preferences when it comes to home buying, influenced by factors like life stage, economic conditions, and technological advancements.

First-time buyers, and any existing owner considering selling, relocating, expanding their real estate portfolio, getting rid of an annoying rental, considering a debt consolidation mortgage, or getting a Reverse Mortgage should call me to strategize… It’s never too early.

If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me

Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
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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