OCTOBER 2021 NEWSLETTER

 

Usually this time of the year we start to see a little buyer fatigue, and statistics show that there is a 12% decrease from last year as far as buyer interest, but I really have not witnessed anything like that in the South Bay.  It’s true we are not  receiving the 12-20 offers we saw earlier in the spring months but there is still plenty of interest and offers are being generated shortly after properties hit the market. Interest rates ticked up slightly which is also typical for this time of the year. There is a small upward pressure to raise rates as the FEDS are pulling back on quantitative easing, so you see most buyers lock in their rates upon acceptance of offers. The whispers are getting louder when the subject of inflation comes up so we might actually see a rise in long term rates.  The market is still sensitive to pricing and of course condition.

 

Besides rates being so favorable and demand still there, the one dynamic that is still driving the market is inventory, or a lack thereof.  We are down 28% from 2020 inventory, so as this remains an issue for buyers, sellers are definitely reaping the rewards.  I can’t pinpoint anything right now that will change regarding inventory in 2022. What is already seeing some movement is income property.  New pending tax laws regarding capital gains is certainly making investors rethink their real estate portfolios.  We have already seen large real estate holders sell off a lot of their apartment buildings and other commercial real estate and exchange out of state before 2022.  Of course, this applies to any property not considered your principal residence and has cap rates that have not yet been firmly established.

 

Sandy and I had three big events happen in September and it was great to see so many of you attend. We had a Blood Drive benefitting Children’s Hospital of Los Angeles and, because of your generosity and that of some fellow agents we were able to donate over 32 pints of blood, helping a much needed cause. Sandy and I thank you.  We also had our 14th Annual Ice Cream Giveaway and it was well attended for sure. It’s always one of my favorite events, love to see kids’ faces full of ice cream. Lastly, we had our annual shred event which provides onsite shredding for your old documents and you showed up early and often. See you around the neighborhood!

July 27, 2021

July 2021 Newsletter

July 2021 Newsletter

 

As expected, the market slowed down after the July 4th weekend. People were intent on getting out of the house and taking family vacations. Two weeks afterwards, the market has definitely slowed down a bit. Interest rates are still phenomenal. As of this publication there are 20 new listings that have just hit the market in the last 7 days!!! Skewing the supply and demand dynamic. The Federal Reserve just met and it seems like they are denying pending inflation, however, there is talk about raising rates possibly next year. The ten year treasury stands at 1.75%, boosted slightly by foreign investors seeking a safer haven for their money as most countries are at a negative rate. We are seeing fewer cash buyers, but most offers from buyers have a minimum of 20% down. Closings are very quick still, most escrows typically closing in 30 days. However, we are seeing offers with as little as 14-21 day closings and allowing the seller to rent back at no cost to seller post close of escrow. The buyers that are paying cash are getting “purchase money rates” and are refinancing within 90 days after close of escrow. We are seeing some buyers taking advantage of their relationship banking, moving their 401K money into these institutions to get as much as a half a point off their interest rates. Most buyers are locking in their rates upon acceptance of their offer and not “floating” to see where the market ends up. We are seeing a cross section of buyers from young families with their parents helping out on the down payment to young professionals in the tech industry with lots of money down. The lower rates kind of eases the tension buyers feel when they thing they have overpaid for the property.

We are starting to see a lot of commercial space available as the stay and work at home dynamic becomes more permanent in nature. All indications from leading economists say the market should be strong and steady for the rest of 2021 and 2022. By steady, they mean a lower single digit appreciation across the board, compared to the double digit appreciation we have seen in the South Bay the last two years.

The numbers are in for the first six months of 2021 and RE/MAX again is the #1 company in the South Bay in transactions (number of homes sold) and dollar volume. As agents we are bombarded by what others consider the next best thing, the next best app, and the next widget to help our business, Sandy and I pride ourselves on personal care

and attention. While we do have the best technology at our fingertips, and feel we market our properties better than anyone, it’s still about the personal care and attention that makes a difference.

Please don’t hesitate to call us for any of your real estate needs, from a simple valuation of your home, what to do to your property to make it the most presentable, or referrals to trust and probate attorneys we have worked with, to all of our vendors including plumbers, electricians, handyman, painters, haulers, etc. See you around the neighborhood! 

 

Posted in Market Updates
July 31, 2017

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