What should you expect for the Fall real estate market in Los Angeles in 2022? Stay tuned.

It’s Scott Himelstein with the Scott Himelstein Group. All right, so today we’re talking about what you can expect for the fall real estate market here in Los Angeles County and San Fernando Valley, and of course, Porter Ranch.

So, here we are, we’re already in the month of October. Hard to believe that we’re already this far into the year. We’ve started the fourth and final quarter of the year. So there’s a lot taking place here in our local real estate market. Now, we’ve kind of chronicled some of the changes that have taken place in the last several months; but what do I expect to happen here in fall of 2022 in our local real estate market?

Well, I think you have to start looking at some of the numbers, what’s taking place. So, I think one of the biggest indicators of what you need to look at right now is inventory. With prices de-accelerating or decreasing, you would think that right now, that the home inventory would actually be increasing. Actually, what’s taking place is the inventory is actually going down. In Los Angeles County, you only have just above 8,000 properties for sale in all of LA County. In 91326 ZIP code, you have just under 45 properties for sale currently on the market. So, this is really low because only just about 45, 60 days ago, you had 84 properties for sale in all of 91326 ZIP code. So that’s showing you that the inventory is going down.

Now, that obviously has to do a little bit seasonally too as we get into the Fall and Winter months. Also, the fact that a lot of people are locked in to very low interest rates in the twos and threes, and so it does not make sense for them to sell, even though maybe they want a bigger house, they need a bigger house because their family is growing, or they want to move to a different location to be closer to work and they don’t want as long a commute. So, as a result, they have to actually stick it out and remain in the house, and that’s inventory that’s not coming on the market.

So, what are we seeing here right now in October and what do I expect for November and December? Well, I expect the inventory to remain really low. Now, yes, the interest rates are high. They’re hovering around 7%. And there’s a very good chance that the rates may increase even more. But like we talked about before, there’s some really great opportunities out there because there’s ways to be able to buy down the rate, there’s a 2-1 buydown(message me how that works)

So, since there’s not a lot of inventory out there, even though you’re seeing the prices go down, the reason why they’re going down right now has nothing to do about a market crash. It’s clearly just because of the lack of affordability. So, right now, you’re looking, after last month, in the San Fernando Valley, you have a median sales price of $850,000. That’s $950,000 for a single-family home. So, at 950,000 and a 7% interest rate, you are looking at a monthly payment of taxes and insurance. of over $6,000 a month. So to be able to afford that, you have to make about 225,000 a year, either a single person or combined, a household, to be able to afford that payment.

So that’s why you’re seeing the prices come down. Now, I expect the prices will continue to shift as we go into the Fall and Winter months, as you’ll have fewer buyers out there. A lot of the buyers want to see what’s actually going be taking place in the next few months and waiting for maybe for the prices to go down a bit. If you’re a buyer right now, you don’t have a lot of competition. it’s a great opportunity for you to be able to negotiate with the seller.

Now, if you’re a seller, we’re telling all of our sellers, don’t wait ’til, you know, the beginning of spring to put your home on the market like a lot of our sellers typically do. This is the time, because it’s a very good chance you might lose another 10 to 20% of your equity if you wait for five months.

Now, if you’re a buyer and you’re able to afford the higher monthly payment, obviously, you’re going to be able to do a lot of negotiating with the seller. That comes from different types of credits for a home inspection, but most importantly, be able to be creative and be able to possibly buy down that rate so that way, your monthly payment is much more affordable. So there’s some great opportunities still on both sides.

One thing, if you’re a seller, to really keep in mind is that you have to remember that the prices have gone up so much, not in just the last two years, but essentially the last decade, so yes, maybe prices have changed 15, 20%, but that’s still way up from where we were in 2012 and what the normal increase in value is for a homeowner over the course of a year.

So, what do I expect again? For both buyers and sellers, there’s some excellent opportunities out there that you can take advantage of in this market, so do not be afraid to buy or sell. If you have any questions, give me a call, 818-396-3311. That’s 818-396-3311.