If you are presently in the market to buy or sell a home in Los Angeles, I am sure you have been following the news about the crazy real estate market right now. You have been hearing things like “low inventory”, “low interest rates”, “rising interest rates”, “rising prices”, etc. So what is it like in the trenches?
Los Angeles home buyers
If you are looking to buy a home in Los Angeles right now, then you need to have a strong stomach.
- Inventory is low enough that when a new property comes on the market, open houses are filled with buyers, if the property even makes it to an open house. There are often offers in play before the open.
- Anything priced at market and in reasonably good shape has more than one interested buyer, and in many cases, many interested buyers.
- In a normal market, your agent would be carefully looking at the comparable property sales to determine what price you should offer. Unfortunately, what your agent has to do now is get a feel for how many other offers there are and how close to asking they came in at. In this market you are almost always going to have to offer at asking or over.
- There are almost always cash offers in the mix and they are not less than the buyers needing a loan. Those cash buyers do not have a loan and appraisal contingency in place.
- Buyers with loans, wanting to stay competitive, are waiving their appraisals, a scary move since if the property does not appraise the buyer is on the hook for the difference between the appraisal amount and the amount of the accepted offer. And there are many buyers agreeing to this. They don’t have much choice if they want to buy a home.
- Many properties come on the market where it is extremely difficult to communicate with the listing agents who are overwhelmed, and buyers are unable to get in on the offer process.
- Most properties are selling over asking.
Los Angeles home sellers
If you are waiting for the right time to sell, now would be it.
- If your property is in a desirable area, in reasonable condition, and priced well then it will not stay on the market more than a few days and it will sell over asking.
- Your agent will work with you to sift through the multiple offers to find the cleanest one, at or near the best price, where the buyer is going to close. Sad but true, but a clean cash offer is going to win over a similar offer which requires loan approval. And there will be many of the former.
- Even though interest rates rose over the past few weeks, they did drop slightly Los Angeles home buyers can still afford to buy.
- Los Angeles home prices are up and rising, but there is going to be a point where those home buyers are going to lose the affordability factor, especially if interest rates rise.
- Home buyers are becoming frustrated and it is only a matter of time before they stop looking.
The Los Angeles real estate market is a difficult one for the buyer and the perfect time for a seller. But Los Angeles home sellers should not wait until the roles are reversed.
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