Some properties are already showing reductions - especially those over $1,000,000
Falling sales may provide a moment of softening prices
Are you the type of shopper who likes to get in on a great sale? Do you get an extra rush from timing markets? Do you like to buy low and sell high? If these statements describe you, the Los Angeles Real Estate Market may be offering just such an opportunity for those who are ready to take advantage of a unique set of circumstances.
First lets examine the long-term trends and underlying forces that are likely to effect housing availability and prices for the next few years in the Los Angeles Real Estate Market. The clear facts are these:
1. No significant building of new units to absorb demand.
2. Very low inventory currently. Under 6 months.
3. Continued low interest rates likely. May trend higher, but not by much.
4. Demand is understated as potential owners continue to live at home, share, or rent.
5. New demand seems strong, but this is not certain to continue.
6. Prices high, but not at bubble levels – may level off
7. Recession likely, but no one expects a long one
8. No clear major economic impact on the horizon
These trends would tend to suggest a continuation of tight supply, which should
create stable to increasing prices. These could be offset by a recession, dramatic increases in interest rates, or some big, unknown economic issue, but any downturn is likely going to be short due to limited supply and steady to increasing demand.
What about the Fall/Winter of 2016/17?
No matter what your politics may be, the looming election is the most likely reason why Los Angeles Home sales just dropped like a rock between July and September and comparing this September to the past several years. Trump, love him or hate him, represents a huge unknowable. Markets don’t like to be in the dark about the future. Hillary is less likely to shake things up, or is at least perceived that way. If she wins the White House, markets are likely to become steady or trend up. If Trump wins, we are likely to see at least short-term instability while the market makers figure out what he will or won’t, can or can’t actually do.
Thus, the window of opportunity that presents itself in the next few months. Buyers are pulling back, sales are dropping, inventories are increasing, and this will likely cause sellers to be more open to take a bit less. The Fall/Winter season is generally softer anyway. This condition merely exacerbates the situation.
The window may be short lived if it becomes clear that Hillary is winning or after a victory by her. This will be especially true if the Republicans hold the house and get at least a 50/50 split in the Senate. Markets love divided government.
The Bottom Line
From now until November 8, you may have an opportunity to make your best deal on a home in the Los Angeles Real Estate Market. That window may continue if Trump is elected. The window is likely to close by the end of January after the State of the Union Address.
If you are interested in discussing the sale or purchase of a home in the Los Angeles Area, please call today to set an appointment. Email Whit@WhitProuty.com or call: 310-777-6302.