Don't Squander

Well, hello, everybody. Happy Tuesday. Welcome to another one of our Southern California First Time Buyer Market Updates. My name is Stephen Meade I am here with Domicile Real Estate and managing Broker where we are on a mission to help California's renters become homeowners. And part of that mission is educating people.

So let me start off real quick before we begin, if you would like to become a homeowner, or you know someone who should be a homeowner, I think we all know one of those people least definitely reach out to us, we would love to work with you. Now, let's get on with the market updates. This is about when good things happening. Not squandering your good fortune. So I'm going to talk about that in a second, you will know what I mean by the end of this. So let's go ahead and get started. Let me back up to the beginning. So let's start off with the news that maybe is not the best. And that is looking at prices on entry level single family homes.

Yes, rates have bumped up a little bit. And yes, prices are back up there. And kind of this, you know, mid to upper seven hundreds. Definitely not the best news. But I'm going to tell you, there's some other good news happening. And I don't know how long it's gonna last. So I would urge you to take advantage of it. By the way, as an aside, this is something that we ironically I think talked about last time, that is, if you are a buyer out there in the wings, understand that waiting for a crash is probably silly, the best thing you can do is wait for little moments that are a little bit more favorable. And I think that's exactly what is happening this time.

So let me move on. And I will show you why. So again, we've got our total monthly payment on our entry level property. Here we are at 6189. That is not a new high point, we actually set a high point last October about a year ago. So in fact, if you account for inflation, it actually definitely is not anywhere near that high point. But it's still kind of a little bit of a local maximum here, you you're kind of in a similar spot, if you are looking at condos executed fact are near a high point. Even accounting for inflation, I think you're about where that high point would be.

Now, if we look at our minimum household income, right, that is required. You know, we're kind of just grazing underneath $150,000 Or maybe right about that 150 Mark, for our entry level single family home and about 120,000 for our entry level condo. I think that's an interesting market dynamic because typically as a percentage, these are very close together that difference that jump going from an entry level condo to an entry level single family home is not as big now why do we think that is? I think there might actually be a couple reasons why we've seen the popularity of condos growing number one reason I think that many first time entry level buyers, they are looking at homeownership a little bit differently, they want less to be tied down to right they want less to take care of.

The second reason I think is necessity. Right as these prices have gone up where you know, those entry level homebuyers who were looking at single family homes are now starting to look at townhouses especially when they have some outdoor space and then also regular traditional condos which may or may not have a balcony or outdoor space at all. I think that's just a function of affordability. Finally, what are we building in terms of units? Well in terms of building units, we are building way more attached homes right now we are single family homes so it only makes sense that that is the direction we're going to see things moving towards in the future.

Okay, let's get back to it. I got a few more slides for you. Today. absorption rate. So this is finally a little bit of good news. So our entry level home is at 73%. By the way, it has not been that low since Gosh towards the beginning part of this year or parts of last year. This is a good thing. If you have been waiting on the sidelines. This is a good week to be in the market. Now our condo absorption level has gone up right it's been trending in that low 70s High 60s That went up to 77% it is still below 80 I still think that is a great time if you are looking at condos as well. If we look at our total inventory, this is the one that really has me the most excited because look at this trend and look at where we were even the last year at this point last year.

We were starting to trend kind of flat or down on inventory on number of active homes. For once we are actually seeing that number it has really accelerated in the last two weeks. This is great news if you are an entry level single family home buyer but even if you aren't it is still some good news too. Because we are still seeing this now. Number rise a little bit. Are we down from last year? Of course we are. But it's not as bad as it has been. This is better numbers. If you are a person who is in the market. Now we live our 14 day still active percent, that is actually holding pretty steady that we notice our inch level single family home, look at it, this number jumped up a bit. What does that mean? It means we are at a moment. And I'm using that term like momentary moment of reduced competition for those entry level single family homes.

So if you're a person who's been sitting on the sidelines, now is a great time to be in the market for one of those homes. And then finally, this really kind of pulls it all together. This is our relative inventory, right. So this is week supply of home. So this is the number of homes that we have available that are active, versus the rate at which they are siphoning away that they are going into escrow. And you'll see this blue line is our entry level single family homes that jumped by almost a full week it was 4.85 weeks notice 5.74 weeks, whereas that condo inventory has remained flat.

In fact, these numbers are now very close together. We haven't really seen them this close since back here in February. So definitely, this is one of those little bits and times and I was talking about this exactly two weeks ago, that if you are a buyer, what you want to do is you want to kind of be like Super Mario Brothers, right? Like you remember, Mario, he's at Bowser Castle, Bowser is shooting up these fireballs. And if you were a kid, and you're as old as I am, you got the timing down, you watch the timing of those fireballs come out. So you could jump at the right time.

And I think that's exactly what we're seeing here is that this is a moment that you should think about jumping because it is a moment of relatively less competition than we have seen, especially for those entry level single family homes. I've talked about this a billion times most of you know my viewpoint is that single family homes with real yards will become an incredibly valuable commodity in the decades to come here in Southern California.

And that an investment in them is a very, very solid investment to be in that traditional single family structure. If you can make that work for your budget. Of course, I think if you cannot make that work for your budget, you're still better off owning something than not owning anything at all. I think that's pretty much it. Thank you so much for watching. If you or someone you know should be a homeowner, definitely reach out to us so you can use our expertise to help you make better decisions. And then don't forget to like subscribe and hit that notification bell questions and comments as always, we love them. We will see you again real soon.