The media is typically four to five months behind what is currently happening in the market. So today I’m sharing the real indicators so you’re properly informed.
The first indicator of how a market is doing is how many homes are coming onto the market. That number has decreased by 19%, and there are a few reasons why. There are currently many sellers who don’t want people walking through their houses due to the health crisis, so they don’t want to sell right now. Most of the current homes for sale are former rental properties or owned by people that have to move for their job, and we’re not seeing the number of new listings we’d usually see this time of year. This low inventory is also fueling the price surge we’re seeing.
The second indicator is the number of houses going into escrow or pending. That number has increased by 26%. Most properties are selling fairly quickly if they’re priced correctly. The average time spent on the market in the San Fernando Valley right now is just under 30 days, in Granada Hills it’s just over 25 days, and in the 91326 ZIP code it’s 24.4 days.
“The media is typically four to five months behind what is currently happening in the market.”
When you throw the historically low interest rates on top of this, that’s driving the number of escrows. Interest rates are currently under 3%. For example, if you bought a home for $750,000 a couple of years ago, today the same house may be worth $850,000, but with these interest rates, it’s cheaper to buy the home now (including property taxes and everything else). That’s why there are bidding wars for correctly priced houses across the board.
If you’re currently looking to buy, it’s a bit difficult; you’re going to have to be more patient because there are many showings and so much pent-up demand. We recently showed one of our clients a listing that had 65 showings scheduled in just four days. We showed another property that had a line out the door because a showing was scheduled every 15 minutes; that home ended up getting 20 offers. Our local market is going nuts right now; buyers need to be aggressive.
Remember that though prices are currently going up, you’re buying in an upswing. It’s always better to buy in an upswing than a downswing. I predict there will be a great opportunity of double-digit appreciation by the end of the year because of all this.
If you’re considering selling your house, you’re in an excellent spot. Sellers control the market, and buyers are competing for your property. You can get top dollar and often over the list price right now.
Inventory is down 50% from this time last year, and we only have 1.2 months’ of supply of inventory in the entire San Fernando Valley. As an example, 91326 has nearly 13,000 single-family units, and there are currently only 51 for sale. Generally, we have about 90 to 100. That’s making a huge difference.
If you have any more questions or want further information about buying or selling, give me a call or send an email. I would love to help you.
