If Things Were Good Would You Know It?
Well, hello, everybody, and welcome to a another First-Time Buyer, SoCal Market Update. I'm your host, Stephen Meade with Domicile Real Estate, where we are on a mission to help California's renters become homeowners. And you know, the topic this week is kind of interesting, because I have some good news for you. And I don't always have good news. In fact, I would say in the last three years, it is for first time homebuyers. And it's typically not been good news, right. And I do have some positive news.
And it got me thinking about this idea that sometimes we get inside of our own heads. And our time horizon of analysis is so short, that we don't always have really a very good objective. Look at where we are. And, you know, one of the things I've known throughout history is that there have always been challenges to homeownership, if it were easy, everybody would do it, and our homeownership rate would be near 100%. But it's not easy. It's just that those challenges tend to change over time. So one year, it might be a lack of inventory, another year, it might be high interest rates, it might be a lack of financing ability, that's been a challenge in the past. There are always these challenges that show up.
And I feel like it's, it's our job to really help people develop strategies to overcome these challenges. Those are the people that really win and get ahead of this. So let's go ahead and take a look, I've got some good news for you. And we can have kind of a little bit of a bigger discussion about, you know, where does this actually fit, relatively speaking in terms of how our market conditions for first time homebuyers. So see, we've got not sure why I'm not getting that to come up here. Let me go ahead and, and work to fix that. I think I've got an idea on why it is not happy.
We've been having some problems lately with our with our screen sharing, but let me go and do this. There we go. Now we've got it working for us. So first off, let's talk about prices, I actually do have some relief if you're a first time homebuyer in the marketplace. You know, our market is very, not as seasonal as the Midwest or other areas. But it still has a very seasonal component to it. And we see kind of once we get through this October timeframe, things start looking a little bit easier. This through the end of the year is my favorite time of year for homebuyers, there was less competition. And usually the market is just a little bit easier.
And this year is totally shaping up to be that we've already seen just kind of some signs that you know, this relentless rise in property values at least, has kind of cooled off a little bit the last few weeks, that's pretty normal. And I think we're gonna see it kind of rest kind of steady or maybe a slight decline for the rest of the year. If we take a look here at total monthly payment, obviously that is we are now past the $5,000 month mark for our entry level condo, which is two bedroom two bath here in LA and Orange counties. And remember, this includes this is based on 5% down it was mortgage insurance taxes, HOA fees, this is really kind of an all in number, right? So if we go back here, it's based on this 550.
So if you if you look at this, and you look at our intro, we'll single family on that, too, is you know, over this 6500 number that's definitely a high, but it also is leveling out, we're seeing a little bit of relief also in interest rates, not a huge amount. But some people are kind of calling the top of the interest rate market, we'll have to see if that turns out to be true. We look at our household income required.
We are here at about 100 I'd say maybe $165,000 of income for entry level single family home again, that's based on 5% down and $124,000 of household income with zero other debts for our entry level. Condo. And you know, while these payment numbers look scary, what does that put us? I mean, you know we've had back in August, we were at 122,000 income required. Back in July, we were at 120. Back in March, we were at 116. And if this point last year were actually at 117. So I think when you kind of put that into perspective and you given given the level of inflation over the last year, I don't think this 123 682 is really a terrible, horrible number.
If you look at our absorption rate, this is also some good news for buyers. When we see these numbers here in that 70 67% realm. That means there are a significant number of homes that are not going to Ameet licko under contract, there are going to be homes that are out there that do not get a flurry of offers on them. And if you are a budget conscious buyer go after those homes, the ones that are not getting tons of activity. If you look, our total inventory is actually bucking the trend last year, we're seeing inventory actually rise, which normally does not do this time of year. Of course, we are still way below where we were at last year.
But normally this is kind of on a downward trajectory by now Rhl have a condo market is a little bit more stable and staying pretty flat. Here's the other piece of good news, you know, we track both and absorption rate, right, which is you can see this number kind of sliding a little bit down kind of gradually but steadily, meaning the markets less competitive, our 14 day still active percent. That is also another measure of competitiveness. And in this one higher means a less competitive market, you'll see we kind of drifted all summer long. And then in the last month or so it's kind of risen up with these interest rates.
Again, another sign that things are a little bit easier for you if you are an entry level home buyer. And then finally, we've got our weak supply of homes, right, which is another little bit of good news. And this is sort of the not only is our absolute inventory rising, but our relative inventory, meaning how fast are people snapping up homes, you can see your financial Macondo we are now over 10 weeks, that is still not as good as it was last year. But honestly, it's way better than it was in the spring, where at one point, we're at only five weeks of inventory, our entry level single family homes, those are rising as well, which is good news, not quite to the same level.
But if you look that is pretty typical. Normally, those single family homes are just a little bit more competitive than the entry level condos. But you know, overall, let's have a little bit of a discussion here about how do you judge when something is when it when it's a good time to buy and I always tell people, number one, more than any other market effect is your own personal situation, what you need, what you're looking for your income stability, these are all factors that really affect suitability for home buying and really have a much bigger effect on your experience than the overall market. Real estate is a marathon, it's not a sprint, I know that might be a little bit hard to understand and an error when we've seen years, recent years where homes have gone up by 20% in a single year, that can look like a great investment. But homeownership is something that you're really in it for the long run, you know, if you purchase a home, when you're in your mid 20s, right? That means by the time you are say 65, you even if you had a 30 year loan, it would have been paid off for 10 years already, right.
So even if you say I'm going to upgrade to an even bigger house, when I'm 35 years old, and have that loan for 30 years, you know, this is really where people are accumulating that wealth. And you know, that really kind of evens out some of the market ups and downs, which I think is a big concern that people have. But again, this is a marathon, it's not a sprint, this is about where you can end up 3040 years from now, not just about where you're going to end up in two years. And by the way, if the market grows, and you make a bunch of money in your house, awesome. I am all for that. That is great. But you know, I also think you really want to have a strategy that's flexible, where you can take advantage of that should have happened.
And also save homes just grow by an average over the next 10 years of three or 4% that you're also in a great position from that as well. Anyhow, thanks so much for watching. If someone you know or you believe you should be a homeowner, which if you're in California and watching this, the answer is probably yes to at least one of those questions. We would definitely love to hear from you. Don't hesitate to reach out to us. We can lend you our expertise. Don't forget to like subscribe and hit that notification bell. And we'll see you again real soon.