One For The Books....
Housing and financial markets have a funny way of doing the opposite of what you'd expect. Worst global pandemic in a generation with extreme unemployment and national lockdowns? You would think the housing market would slow down out of an abundance of caution from buyers and sellers and perhaps some of those who lost their jobs would also lose their homes due to lack of income, and this was true....for a second. From March to April, home sales fell sharply as the first wave of lockdowns and fear over the virus shook the world, but starting in May they took off...and quite a ride it has been. California home sales in January have now had their largest year over year growth since 2009 (28%). A survey from Redfin in December shows that a shocking 63% of homebuyers made an offer on a home without even setting foot in the property! No doubt the record low interest rates have played a huge part in this trend. With interest rates at 60 year lows well qualified home buyers have found the decision to buy a house a "no-brainer". The sheer volume of buyers has led to an incredibly competitive market however, where some homes are barely on the market for one day and contingencies are being waved left and right. Oh and lets not forget record price increases, with the median home price in California up a whopping 16.8% year over year in December. And foreclosures? According to ATTOM, foreclosures are now at the lowest levels ever (since they began tracking in 2005). These foreclosures are down 93% from their peak in 2010. No doubt this is due to the ongoing national eviction moratorium, which the new administration plans to extend through September 2021. So we have record high prices, record low rates, and record low levels of foreclosures, what does the future look like when we are exploring new territory in all of these figures? In order to answer that I believe you have to look at one of the key factors driving these trends...Federal stimulus. The Federal Reserve has stated that they will not raise rates for quite some time, and that they would like to see inflation tick up and even "run hot" for a while while the economy is getting off it's feet. This means that they will continue their policy of "easy money" even if the economy heats up and inflation rises. In addition they have been buying bonds, which facilitates the securitization of mortgages and incentivizes lenders to lend. Also there is the aforementioned eviction moratorium, which has kept foreclosures levels at record lows. These policies have a huge impact on the factors mentioned above: low rates mean more qualified borrowers which leads to larger homebuyer demand, and foreclosure moratorium means even those struggling can stay in their homes putting an even heavier strain on inventories. These policies have been essential in "bridging" us through the crisis, but the biggest question out there is what will happen when these policies are discontinued? Stimulus such as we have here often creates a "cliff" when it is removed, as now the market must adjust to having the punch bowl being taken away. There is good news on the pandemic front however, and hopefully this will bring our economy back on track and we will no longer need such stimulus. If there is one thing I have learned about both housing and financial markets, it is to expect the unexpected. The big factors that impact the market are almost never the ones that you see in advance, and this Pandemic and the ensuing response has been no exception. We are living in a very challenging and fascinating time, but one that will no doubt go down in the history books and be studied for generations! Happy New Year to you and your loved ones! Take care, - Gabe
Just Sold!
6737 Vesper Ave, Van Nuys 2 BR | 1 BA | 1041 SQ FT | 7,434 SQ FT Lot | $667,900 Calling all content creators! One of a kind opportunity to own a home with a separate turnkey creative space! Through your white picket fence you will find an inviting front yard and beautifully restored exterior. Inside you are greeted by a charming living room and dining room. Large windows allow plenty of natural light and the hand restored working fireplace adds charm. Sparkling hardwood floors guide you to two good sized bedrooms with brand new ceiling fans and attractive lighting. The bathroom features carefully restored tile and new fixtures. Kitchen includes a lovely breakfast nook, hand restored cabinets and stylish tile work. Property has brand new electrical. Huge backyard with firepit and room for a pool! Legally enlarged garage is currently used as a recording studio, but perfect for any creative use, home office, or possible ADU! Features include two large rooms with high ceilings, a storage room, laundry room, a 1/2 bath and plenty of attic storage. Not to be missed!
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Aegis Management Inc. Lic. # 01932663 All material presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footage are approximate. Equal Housing Opportunity.
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