Are You Waiting 4 Superman?

Well, hello, everybody. Sorry, it took us a second there on the stream. Many people know I'm a big fan of education and kids getting education and trying to figure that out. And in 2010, there was a very interesting documentary that came out and titled Waiting for Superman. And that documentary was really about sort of the education system, the state it was in and kind of what was really going on to this idea that people weren't really doing enough, they were kind of waiting to be saved. And that's what I want to talk about today on our southern California first time homebuyer market update. Let's get started.

My name is Stephen Meade. I'm the broker owner here at Domicile Real Estate. And I think the question is our homebuyers Waiting for Superman waiting for somebody to come and save them. And I think while there's a lot of political attention on home buying, I think finally some politicians are starting to see the communities where people own their homes tend to be much, much stronger communities than those were that are primarily made up of those who rent their homes, from a perspective of just wealth disparity, right.

Families who live in the home, they own, on average, have 30 times the net worth of those who rent the home that they live in. I think homeownership is great for a lot of reasons. But if you are like many people in Southern California, you're sitting here looking at the stats, and you're looking at the numbers, and you see the incredibly challenging environment they're in and you might be discouraged. And you might say, I'm just gonna wait here for somebody to save me. I don't think that's a good idea. And I'm gonna go through a stats, and I'm gonna explain to you why.

Even though politicians are giving this more attention, I don't think anyone is really coming to save you. And I think you're going to have to kind of make your own way out here. And take the help wherever you can find it, whether that's real estate broker just like us that work really hard with first time homebuyers. lenders who help or even just kind of working on adjusting your expectations, and really making a long term plan of this and, and kind of working on your own mindset. But let's go ahead and we're gonna jump right into our market stats here. So as you can see, we have a little bit of good news. But I always tell people, these closed prices are looking in the rear view mirror.

This tells you where the market was 30 to 45 days ago. And you could see for our blue line, which is our entry level, single family home, three bedroom, two bath and Los Angeles and Orange Counties. That number dropped, but it's still elevated, you'll see there was kind of like a jump around the beginning of this year, kind of to a new plateau. On the condo front things are a little bit more of a steady and slow increase right over the last year. But prices are definitely higher this year than they were last year at this time. And I think that really speaks to the advice we gave everyone which as we said, you know, the prices are not going to be going down, they're going to be staying the same or going up. And in fact, it turns out since that point of time they have gone up.

We look at our monthly payment required. We see we're not actually near the highs here, you know around 6200 For a single family home and 1400. And remember, we try to make this a realistic look on this payment front. This is based on 5% down that includes mortgage insurance, property taxes, HOA fee, in the case of our entry level condo, and we really wanted to give people an accurate idea of what a true entry level monthly payment looks like. You're not coming in with a huge downpayment and our minimum household income, you know, again, we're right around $160,000 there for our entry level single family homes and then around $120,000 Therefore our entry level condos.

We look at our absorption and this is the area where I start to get a little bit concerned. Why am I saying that Superman is not coming to save you? Well if you look at this absorb Motion rate, we have headed up, really pretty much since March, we've gone upwards, we're now at 90% on our inch oval, single family home, that is a highly competitive market. And guess what? That is pretty much higher than we saw all through the spring of last year. For those entry level, single family homes, and even our condo market has also really recovered to an 85%. That is also a very competitive market, we have watched our market get more competitive. I think one of the things that's happening a lot here, you know, with this absorb story, what's fueling this?

I don't think it's it's not that rates have come down. In fact, today, they actually they actually jumped a little bit, I think what's going on is people are realizing that the rate cuts aren't around the corner, and they're tired of waiting, we have a lot of pent up demand for homes. And we look at our total inventory, you know, we actually have a pretty decent string so far with those inventory levels rising. And now those that has really petered out. And it's actually starting to fall. So good news is, our inventory is a little bit better than it was last year and kind of both our entry level condos and single family homes. The bad news is, you know, at this point last year was going up. And now it looks like we've actually started to turn the corner on that inventory heightening, we look at our still active percent, I think there's really kind of tells an important story is look at that blue line, look at where that is for our entry level single family homes.

This is a point that was among the lowest points we saw last year. Again, remember low equals highly competitive market here, especially for those single family homes. And then finally, we've got our week's supply of homes. And this is that relative look at inventory, right? This is that look of inventory, based on how fast our homes flying off the market. How many weeks would we have no new listings showed up. And well guess what, these numbers are starting to look a lot more like last year they been elevated. But we're starting to see these numbers tighten up. And in fact, you know, we're kind of towards the mid fours there. In terms of weeks for those entry level single family homes that really is kind of ground zero of a competitive market.

And you know what I mentioned this, I'm not, I'm not trying to be a downer, I'm not trying to be somebody negative. But if you're a person waiting on the sidelines, or waiting for something to kind of happen in your favor, right, either a new a new law in California or the Fed to lower rates or whatever sort of external element that you're hoping is going to happen. And I don't think it's wise to count on that. I think sometimes when those things happen, that's a great unexpected benefit. But a lot of times, to be honest, you know, every single first time buyer I have ever worked with every single one of them, has said they wished they had bought dinner, none of them wished they had waited longer.

Even those buyers who might have bought in 2007 If you talk to them now, they don't wish they had waited. They wish they had gone even sooner than 2007. And so, you know, I mean, that's my advice to people out there is stop Waiting for Superman. You know, is it possible something's gonna come and there are these little we get thrown bones, right, like the California Dream for all. You know, program? Is it a great program? Is it a benefit to a lot of people? Of course it is. Is it a benefit to enough people? Probably not probably not enough to make a big difference for the bulk of you out there who are sitting on the sidelines. So credit the end of the commercial for this one. Once again, I'm Stephen Meade with Domicile Real Estate. We're located here in Southern California.

If you would like to own a home, and you really want to make this an intention and a deliberate plan. It's your turn. We'd love to chat with you definitely reach out to us. Also find a little plug. Tomorrow we do have a webinar, how to buy and renovate your first home if you do not have rich parents. It's 30 minutes it's live. It's easy. The link is down below in the description if you would like to sign up for that. Don't forget to like subscribe and hit that notification bell and we will see you again real soon.

 

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