Rainy Buyer Forecast? -- SoCal First-Time Buyer Market Update: 3-21-23
Well hello everybody and welcome to a another episode of our Southern California first time buyer market update. My name is Stephen Meade with Domicile Real Estate where we are on a mission to help California's renters become homeowners. And before we begin, just a little bit of a commercial, I've got two things that I want to tell you about that I think are important that you might be interested in. If you are a Southern California first time homebuyer.
The first one is that we actually have there's a program put on by the city of Los Angeles, where you can get up to $115,000 towards the downpayment, of your first home. And this is actually allowed for middle income borrowers. So this is really kind of an expanded criteria, a lot of people will qualify for this. And many of you may be unaware, but the city of Los Angeles limits actually extended to the San Fernando Valley, San Pedro, on North Hollywood, there are a lot of places where these homes qualify. So we've got a link down in the description if you're interested in that. And secondly, we are doing a webinar on March 28. It is perfect.
For those of you who are first time homebuyers and also looking to be first time investors. And it's a quick webinar 25 minutes, you will not have to go on camera, I promise, where we can tell you how you can actually become a property investor in Southern California with very little in the way of downpayment funds, and not the normal 2025 or 30%. That is usually required on investment properties. Okay, let's go ahead and begin. It's been two weeks, obviously, interest rates have been whipsawing. Back and forth, the bank collapses, kind of a lot of things going on the market is very turned and turbulent right now. So we actually do have a bit to talk about. Let's go ahead and jump right on into it.
Let me bring up our charts here. All righty. So the first thing we're looking at is prices. Again, I always give this but this is based on four to six weeks in the past. So we are seeing prices flatten or decrease this lightly for both our entry levels, single family homes. And for our entry level condos. Again, don't be fooled what was happening four, four weeks ago, interest rates were going back upward rather quickly. Now they have tempered a bit, we're kind of in this whipsaw effect. So I expect to see there, these prices are going to kind of hang out in these ranges. That's my expectation for the next four weeks or so. If we go ahead and take a another look at this on monthly payment, we do have a little bit of good news on this front. And that little bit of good news is you'll see I want to talk about the payment on these priced homes that we had in our previous chart.
So if I go back here real quick, 730 and 552. If we go into here, what this is based on is a payment based on the prevailing 30 year fixed interest rate with 5% down including mortgage insurance, taxes and in the case of our condo, including an HOA fee. So if you look at where these are just under $5,800. For our entry level single family home, you'll notice that this has really been the same zone we've been playing in for almost the past 12 months, maybe the past 10 months or so. Same thing here in our condo 4637.
We hit a point of 4553 4560 Back here in May, this one's a little bit higher, but generally we're not in a zone that's wildly unrealistic from where we've been in the last 10 months or so. Take note of that. That means this is where the market is finding a little bit of stability. If we look at our minimum household income required to qualify, it is $142,000 for that entry level single family home. That is assuming no other debts and $113,559 for our entry level condo.
Obviously there are homes that are priced less than this. This is meant to be our average entry level but throughout Los Angeles and Orange Counties, there are homes that are below this. Let's take a look at our absorption rate and you know kind of some mixed signals here. Both of these came down, but our entry level single family home is still at 93%. What does that tell me? largely speaking, these homes are still getting snapped up just as fast as they are coming on the market for these entry level single family detached homes. The condo market got a bit softer, it's down to 82% that is still a very brisk market. Look at where we were for the ladder. Half of 2022 look at what these numbers were 60s and 70s. Right?
Obviously, we are in a different market than we were late last summer, it is not the same market at all. And that is further bolstered by this chart, we are rapidly approaching a point where our total absolute inventory is not that different than it was a year ago, that you remember what things were like in March of 2022. They were pretty crazy. And so look at where we are here we are below 1500 homes in our entry level single family home category. And we are under 1000 In our entry level condo, that is about half the inventory we read in the peak late last summer. And we are also again, about half of where we were on our inventory late last summer, in fact, a little bit less than half on our entry level single family homes. So we are in a very low inventory environment.
I'm going to repeat that again. Because it is important to understand that I mentioned around this point here in September, October, wow. If you're a first time homebuyer needs, closing costs, concessions, if you need to get a break down, these things are pretty easy to get right now you should move, we are not in that same market anymore. So there are some houses which are sitting and you may be able to get these concessions. But most homes if they are price, right, they are moving, if they are under that million dollar mark, if we look at are still active, after 14 days, these numbers have come down a bit from their peaks. That means the market is more competitive and they are now leveling off.
This metric will be very, very much influenced by the interest rate swings. I think that's kind of where our point of inflection is we've been that way for a while. Here is the one that I think really says a lot. And there's kind of a good news and a bad news. So here's the good news. This is our relative inventory chart. So this tells us how many weeks of inventory we have not the absolute numbers, but how many weeks we have. And the good news is, we actually have about twice as much inventory as we did at this point.
Last year. If you come down here, three team we're at like just over three weeks at just under three weeks of inventory. Now we're at we have for our entry level single family homes, we are at right about, I think we were at just under five weeks of inventory. So it's flat, and just about six and a half weeks of inventory for our entry level condos. So bearing in mind to take a look at this, this is still not a lot of inventory.
But it is better than we were last year. But it is not nearly as good as it was in the latter half of 2020 to look at these numbers, 10 weeks for condos, nine weeks for single family. Really that was a great opportunity, a great chance this time period in November, December really a great time to buy. Of course everyone was afraid of interest rates going up so they didn't want to buy. But here we are. We're better than we were last year not as good as we were before. I think one of the things that we talk about right now is I think people are in this sense of the world is moving very quickly. And I'm not going to deny that I think the world is moving very quickly. But I also think if you were waiting for a time when the market feels calm and easy. You're gonna be on the sidelines for a while I don't think that really exists. In our short term. I don't even think it exists in our long term going forward. Anyway, that's all I've got for you this week. I hope you're having a happy week.
If you are interested in finding out a little bit more about what the next steps are. If you're looking to buy or if you're interested in the down payment money from the city of Los Angeles, definitely reach out to us we've got a link down below in the description. And again, if you are interested in that webinar we have coming up it is free. You do not have to be on camera about being a first time investor with limited down payment. We've got a link in the description to sign up for that below. Thank you so much for watching questions and comments as always, we love them. Do not forget to like subscribe and hit that notification bell and we will see you again real soon.
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