What a crazy world we live in! As the impact of the pandemic continues to sweep through the economy, one thing has become increasingly clear: some things will be deeply affected by the pandemic, and others will not. The percentage of employed Americans who worked from home used to be around 6% pre pandemic, it is now over 50%. What happened to many who used to work at their place of business? Well, a significant amount of them are now unemployed, as unemployment increased a whopping 275% since the start of the pandemic.
Despite these drastic changes, several ongoing trends have only been reinforced, such as the persistence of lower interest rates and lower housing inventory. The Federal Reserve has committed to keeping interest rates near zero for the foreseeable future, and mortgage rates have continued to drop to generationally low levels. Money is cheap, and with housing inventory in Los Angeles continuing to hit lower levels, housing is well...expensive! There is an incredible amount of competition amongst buyers at the moment as inventory is low and everyone is looking to their home not only for their personal life, but work life as well.
Sellers: While the idea of selling in a pandemic may be daunting to some, pent up demand for real estate, low interest rates and super low inventory means there will be more eyeballs than ever on your property, and competition can help to drive your price higher. Additionally, the brokerage industry has adapted well to working under pandemic conditions and at LACR we are taking all precautions to give our sellers peace of mind during these times.
Buyers: Be ready for some competition and have a long term time horizon! If you are looking to buy a home, know that the market is not yet trading at a discount. However, if you have the right income profile and can commit to a long term investment, you can borrow for cheaper than ever, making this a great time to purchase the right home!
Investors: While real estate prices in Los Angeles have not yet come down, there are many multifamily owners who will have vacancies and non performing units due to the increased economic stress. Higher end and short term rentals have been and will continue to be affected by the pandemic, and retail and office assets are also likely to be affected by the impacts of working from home. These factors may lead to lower cash flows for these properties, and eventually, lower prices.
Real estate, especially single family homes, is a robust asset class as demand is always high especially in areas like California. While many things have changed in recent months, people's desire to have a home they love (and nice weather 😉) has not changed. Stay safe out there and as always if you have any questions about real estate or investing, I would love to hear from you!
Take care,
- Gabe
Featured Listings
Elegant 3 bed 2 bath home on a quiet and attractive street in Sherman Oaks. Convenient access to the 101 and 405 freeways, and located within two excellent school districts. Upon entering the home you will find real hardwood floors, a beautiful natural brick fireplace, and a spacious living room with a well constructed skylight to bring in plenty of natural light. Pass through the dining area and you will find a size-able kitchen with beautiful oak cabinets, sparkling new appliances, large premium washer/dryer and vast storage space. The master bedroom has a large and attractive en suite bathroom, also with extra storage space. The large tranquil backyard features impressive, low maintenance turf and has plenty of room to add a pool, ADU, or garden. This home has enormous potential for both homeowners and investors and is ideal for a young family that wants to stay close to the action!
Have you had any thoughts of buying or selling a home or investment property? LA Creative Realty is a boutique real estate brokerage firm. We combine generations of real estate and investment experience with modern technology exceptional client relationships and thoughtful investing to deliver the dream home for our Buyers, the best prices for our Sellers, and the best returns for our Investors. Learn More
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