I specialize in selling homes in the Studio City, Sherman Oaks and Encino neighborhoods, and the last six months have been the busiest that I have seen real estate in at least the past six or seven years.
Inventories were down, everything that was priced right sold fast, and a lot of the sales were homes that sold with more than one offer, including foreclosures and short sales. I would say that during this six month cycle, prices went up around five percent.
However, right now, I am seeing properties taking a little longer to get offers; I see the inventories rising a bit.
So was this just a temporary blip in the market?
Here are some of the factors that were happening to create this recent frenzy:
- Home prices are lower than they have been in years; they are down about 25-30 percent from the top of the market.
- All-time low interest rates are still a huge factor in the increase of home sales.
- I believe that a lot of home buyers were sitting on the fence for a long time, not sure what to do, and they are finally stepping up to the plate and making purchases.
- The job market is still not so hot in the greater Los Angeles area, but for our neighborhoods, I believe that’s not that big of a factor.
- The stock market has been doing better with less dips, so I believe that a lot of people are more optimistic on their overall economic future.
- Banks have made it a little easier on the higher end housing market. There are good loans out there, and the banks are making it a little easier to borrow money. For about three to four years, the banks were only lending to people who had a ton of money. Now, they are loosening up a bit.
- Low inventory always drives prices -- supply and demand. If there is less of something, then prices do go up.
So what does all this mean? Will we have a double dip? Are we on the road to recovery?
I'm not sure.
People ask me all the time if we have hit the bottom. The only way that I can respond to this is by telling them that the only way to see when we have hit the bottom is when prices are going up. I believe that for the next few years, we will continue to see these peaks and valleys in sales and sale prices.
I still believe that if you are a buyer in today’s market, don’t look short term. In the long term, buying a home in today’s market is a great investment in your future. Lock in a great fixed interest rate and enjoy your new home.
Any questions of comments please contact Matt Epstein @ Prudential California Realty @ somatt@aol.com or (818) 789-7408. Matt Epstein is considered the expert for real estate sales in the South/East San Fernando Valley.
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