It's time again for the Real Estate Market Update.
As you can see below under units sold, there are many cities where the number of units sold has gone down (11 cities of the 18 shown) as well as the number of homes that are listed to sell. Housing inventory is at an all time low of under 3 months, which has caused multiple cities to show an increase in home prices.
Part of the reason for prices increasing are strong economy, strong job market, and interest rates that are still low. The lack of inventory also creates a "multiple-offer" situation for the homes that are priced right. Sellers are getting offers from several buyers at a time because there aren't enough available houses for the multitude of Southern California buyers.
Limited inventory also prompts buyers to offer more money (above the appraised price) on homes that have upgrades and are in move-in condition. Doing upgrades or repairs to an older home or "fixer-upper" on their own will often end up costing buyers more money over time. This common practice of "over bidding" on upgraded, move-in ready homes causes local comparable sale prices to go up, and saves buyers money in the long run.
In contrast, the affordability index, which can reduce buyers' ability to purchase homes (especially if interest rates go up - which we are seeing now), is dropping. The current affordability index is currently down to 29%, compared to 32% last month, and 31% last July.
Here is my professional advice: Regardless of the activity of the real estate market you should remember that the most important questions for you to ask yourself in order to determine if it is time to move are can you afford the mortgage payments on your desired home, and will you stay in the home for at least 5 years? When you find a home that meets those requirements (the answer to both should be yes) and your personal desire is to own a new home, then it's the right time to buy.
Let me help you build your personal wealth by assisting you with your next home purchase.
