The main question right now our clients are asking us is there real estate market and whether we are experiencing an inventory problem or an interest rate problem. Over the past year, the topic of interest rates has been on everyone’s mind. Rates have doubled, currently sitting around 6.75% for those with a decent credit score in a conventional loan. Government products like FHA and VA have slightly lower rates. The high rates have led to the question of whether we have an interest rate problem or an inventory problem.

From my experience, I believe we have an inventory problem. The supply and demand in the market are so far apart that almost every house in every micro-market is in multiple offers, regardless of the price point, except for foreclosures, distressed properties, and multimillion-dollar properties. Inventory is down in Los Angeles County almost 50% from November of last year. In 91326 zip code in Porter Ranch we have gone from 84 properties on 11/11/22 to right now to 47 homes for sale.

Buyers are starting to realize that this rate environment is unlikely to change significantly. While we have rates that exceed 7% for bad credit, we only have 700,000 homes for sale in America. Until we see inventory change, I don’t think supply and demand will change because it is historically low at this point.

If you know anyone looking to buy or sell a property, I would love to chat. We can do a lot of things with buyers and sellers off-market due to the significant difference in buyers versus sellers. Last year, 6.2 million homes were sold in America, while this year, it is expected that only four million homes will sell.

I’m Scott Himelstein with the Scott Himelstein Group. Feel free to call or email me with any questions. I look forward to hearing from you!