We’re seeing price reductions on one end and bidding wars on another, what exactly is going on with LA’s hot/cold real estate market? Is it a good time to buy? A good time to sell?
Here’s the deal – many homeowners refinanced when rates were at historic lows in recent years. Short of a major life event these owners would have little motivation to sell, thus discarding their low mortgage and taking on a new one at a much higher rate. LA still has far more buyers than sellers & will likely continue in this direction for many years to come.
Where are the price reductions? Plenty of fixers have hit the market with the majority of price reductions being cosmetic fixers – not exactly move-in ready but also priced too high to be attractive as a flip or remodel. In many cases these are homes which have been owned by the same person for 20-30 years and are more likely to have paid off their mortgage but are also more likely to have outdated finishes & deferred maintenance. Homes in less than ideal locations (busy streets, near highways etc) are also sitting on the market longer and more likely to reduce their price. Flips are trickling into the market but with supply chain issues + tighter repair cost margins some flips are declining in quality so this is another area where we’re seeing price reductions.
Where are the bidding wars? Many of the remaining homes on the market were purchased in cash or are owned by someone who doesn’t want to move but needs to move for a life event. These types of homes are more likely to have been purchased in recent years with more updates and less deferred maintenance. Any character home with curb appeal on a good street will always get multiple offers in Los Angeles. If you’re looking for the picture perfect well-maintained LA home you will be in line with many other buyers.
Getting a house for a reduced price is not always good for buyers and bidding wars are not always bad for buyers! What good is a discount price for a soul-less flip on a bad street? Wouldn’t you rather fight it out for a home with timeless charm in a great location? Homes that get into bidding wars typically continue to get into bidding wars when they are re-sold and homes that sit on the market longer with price reductions usually have a history of the same. Think about that from an investment perspective. You want the house that everyone would fight for, don’t you? Trust me, you do!
So is it a good time to buy? If you’re paying someone else’s mortgage (renting) then it is absolutely 100% always a good time to buy.
Is it a good time to sell? Honestly, it depends on your home’s location & your specific life situation. Give us a call, we would love to weigh the pros and cons with you.
Feelings? Thoughts? Hit us up, let’s chat!