We speak about real estate everywhere we go, as you may be able to imagine. If you are a teacher, you probably speak with others about your profession and the “next new thing”.
I know when I was an LAPD Cop, all of the discussions about trends, equipment and “staying safe” were plentiful.
Real Estate is not a guess. It’s not one of those things that you can jump into without preparation. “Luck favors the prepared”, as I remember being said in a movie that I watched recently.
Preparation Key 1 – Check the current status of the market and get to the bottom of “why”. We are currently in a sellers real estate market. This is able to be proven due to the lacking days on market time frames and the homes selling for more than their established fair market value. Meaning, home prices are still on the rise.
Preparation Key 2 – General Consensus – What is the word on the street? Let SCVnest.com/blog be your resource for those tidbits of information. I use an RSS Reader and read the heck out of real estate articles. (Feedly is my RSS Reader – I pay for premium and it’s on all my devices and can be accessed anywhere) Not just from bloggers without any educational background. I read articles by the Times, WSJ – Wall Street Journal, Fox Business, CNN, MSNBC and others. As I just typed these organizations, I realized that some are not as “trusted” as they used to be – but I digress.
Preparation Key 3 – Expert Advice – Eye To Eye – belly to belly, you get the gist. Discussing your plans with a professional Realtor. Someone who has made a living protecting and serving their real estate clients. This can be done over the phone or during a face-time call. However – it’s really important to see the other person talking with you. You will pick up all sorts of “potential issues” when they are explaining to you why you should be buying or selling now. Watch for it! If they are being honest – you will pick up on that too.
Now – the investor drive – this is a good indicator for market health, however – it may not apply to your specific circumstance.
Speaking about real estate bubbles – you have to understand the cycle of real estate over a 10 year period. How far from a Foreclosure Cycle is the current market? Is the investor slow down because of inflated home prices and slow in sales due to employment factors? Bad Loans being given without any standing rules or lending or guidelines – This would be cause for concern.
Or – Is the investor pull back because of their country of origins currency not being able to continue to compete with a “strong” dollar? – This trend should not slow a real estate buyer. The real estate market is strong as is the base currency for the United States – that is an all green lights ahead scenario.
Time of Year and real estate inventory – We have had historically low levels of real estate inventory in the County of Los Angeles for the past year. This is caused prices to increase to approximately 10% off peak prices for the Santa Clarita Valley and Greater County of Los Angeles Cities. – Of course, areas like Brentwood and Beverly Hills are excluded from these 10% off peak prices statement. Those Luxury Home Markets in the County of Los Angeles will always have high end buyers that will be injecting cash to buy them.
Back to Earth Now – Interest rates need to be considered as well. Where are they are where are they opined to go? We have an additional meeting of the FED this year. They raised interest rates once, this slowed the market for a bit. However, it did not take much time before the market was back into full swing. Buyers were now getting “gifts” from friends/family and using other “creative borrowing” options.
In a 500k home buyer a 1/2% interest rate increase cuts their ability to finance real estate between 40 and 50k. If we have another interest rate increase, the market may not be so kind as to adjust because that interest rate increase will be during a typically slow real estate season. Watch out for this.
As I have stated, If I had a Crystal Ball, I’d be having someone else type this for me 🙂 Be safe – search well and please share this article with those whom you know that need quality real estate representation and guidance. I’m Connor MacIvor with REMAX Gateway, serving our real estate clients in all of Los Angeles County.