What do our current market conditions mean for buyers and sellers in Los Angeles? Is now still a good time to buy?
Here’s the biggest thing you need to remember—historically, we’ve seen seven-year cycles in the real estate market over the last 100 years from top to bottom. Right now, we’re in year 10 of our current cycle, so we’ve lasted three more years on borrowed time. Based on that, we would expect to see a shift in the market with an increase in inventory and a decrease in demand and overall pricing.
What we’re actually seeing right now, however, is the exact opposite. We’ve been to two masterminds in the past two weeks with some of the top real estate minds in the country, and we’ve learned that one of the biggest changes taking place in our market is the reduced amount of new construction. This has put a huge pinch on the amount of available inventory, especially for first-time homebuyers. Because inventory is incredibly low, we’re seeing many multiple offer situations with buyers fighting over homes and driving prices up.
“Because inventory is incredibly low, we’re seeing many multiple offer situations.”
One of the things Gary Keller himself said that resonated with us was that most of the ongoing new construction is happening in the higher-end part of the market, which is exacerbating the issue for first-time homebuyers and first-tier move-up buyers. The top experts we’ve listened to are predicting a couple more years of this.
So, is it still a good time to buy?
Gary’s response to that question was that, based on relative affordability, if you plan on staying in your house for the next seven to 10 years, now is still a great time to buy. Keep in mind, though, markets vary based on a number of different factors, so there are other considerations you should make before deciding to make a purchase.
If you have any more questions about our current LA market or you’re thinking about buying or selling a home soon, don’t hesitate to reach out to us. We’d be happy to help you.