Hello everybody and welcome to another Southern California first time buyer market update. Do not look backwards. I think looking backwards can be a real big thief of joy for today's first time homebuyers. Anyhow we've got lots of steps to go over. Let's get started My name is Stephen Meade. I am the principal here at Domicile Real Estate where we are on a mission to help California's renters become homeowners. I want to jump right into the stats. But first, before we do that, this is not clickbait. Stop looking backwards.

You know, I bought my first home in 2005. Do you know what I thought of in 2005? I thought I wished I had bought in 1999 when the home's for a lot cheaper. And a certain particular house I've wanted sold for a certain unbelievably cheap price. I thought prices were insane in 2005 Well, lo and behold what's happened 20 years later, first time homebuyers have the same mentality, instead of looking backwards to what you think you've missed out on, look forward to your opportunities. And guess what your situation is actually much better than you think. And we're gonna go ahead and show that right now.

So kind of our first thing here, that we're going to talk about is our closed prices. You know, we were really set on a trajectory of seeing prices just jumping for the spring, they've kind of eased off a little bit, but it's kind of a bit of a mixed story depending on whether we are talking about condos, or whether we are talking about single family homes. And so we're talking about our intro with single family homes, we've actually kind of eased off our peak there, we're at 779, that is still a little bit higher than other times, but it is not the highest price condos again, it's not the highest that we saw kind of a bit of an increase, I think we're gonna see as long as these rates stay elevated, we're going to see more modest increases in the next month or two. total monthly payment. Again, this is not the worst time. Let's go back and look here. In October last year, you'll be looking at $6,700 for that entry level single family home as opposed to $6,300 a month today. If you weren't a condo, you would be looking at our peak there was $5,232 versus $4966. So a little less than $300 of difference.

So things could definitely be worse if you're a first time buyer. In fact, they have been worse. Minimum household income required 155 Here frenchville will single family home and just over $121,000 for our entry level condo. And again, just a reminder, this is minimum household income required if there are no other debts at prevailing interest rates based on 5%. Down, this has mortgage insurance does have kind of everything else already included in there. And here we see some kind of some other good news, right is looking at our absorption rate. These are not terrible numbers in the 70s. This means that yes, it is still a seller's market, but not wildly. So I think this is actually a really great period of time. You see, we actually did up higher numbers a few weeks ago, and things have eased off a little bit, especially in that entry level single family home category, which was in the 80s. Now it's in the 70s.

And we are in a better spot than we were in at this point last year. So really good news inventory, still less than last year, but it is actually rising. If you're a condo buyer, I think you might actually see some softness and prices look at how much higher the inventory is this year than last year for our condo buyers. This though one tells me that when I say things could be worse, I think they could be if you look at this 14 day, still active percentage, you'll see this number is dropping. And lower means more competitive. So I do think we see some interest rates off this, we see the Fed does decide to make a rate cut in the next one or two meetings.

You know, it seems like for that second meeting, it's it looks like the Wall Street is guessing a 5050 shot. I think that may give a sugar shot in the arm for homebuyers, but not necessarily enough for home sellers. And I'm gonna go off share here just for a second to talk about something. If you're a buyer in this marketplace, you might think that you want rates to drop but really, you've dumped and I'm going to tell you why you do not want interest rates to drop at least not while you're still looking for a house. If interest rates drop a little bit. Let's say they go to 6% for example. I think that that will produce a huge swell of homebuyers coming into the marketplace but what it won't do is wildly increase inventory All of those sellers who currently own homes are sitting on the sidelines, they need to see rates in the five before I think they fives before they get off their butt.

So, you know, if you're a first time homebuyer, what you really want to do is you want rates to stay elevated while you're looking, you want to secure your property, right? Get in there, yes, the rate is higher than you'd like I understand the payment is probably going to be higher than you'd like as well. However, that means when there is an inevitable rate drop, at some point in time, you will be able to take advantage of that rate, drop, lower your payment and not be in the market against all of the other buyers. Being in the market at the same time as all the other buyers means poor selection and poor terms. Okay, let's go ahead and go back and continue onwards. So we did 14 days talk to if we look at our week supply and homes, this is kind of relative inventory. The great news is if you're a condo buyer, you actually have a lot more inventory this year in 2024, than you had in 2023. And if you are a entry level single family buyer, you have a little bit more inventory.

But if you'll notice, you'll see this numbers going down. So despite the fact that our raw numbers of inventory are going up, our relative inventories going down. What does that mean? It means the rate that buyers are coming to the market is accelerating. So, you know, this is really all we have for you this week. Not a huge update. But look, I know it's tough out there. But I'm gonna tell you something that maybe you do or you don't want to hear. It has been tough for almost every generation of homebuyers and yes, maybe it's a little bit more tough today. In fact, it's definitely a little bit more tough today. But it is not impossible. You have not missed the bus yet.

There are still some great opportunities for first time buyers out there. There are definitely some unique assistance programs that are coming online Shared Equity programs. I think those are probably my favorite. Anyhow, that's it. Thank you so much for watching. Don't forget to like, subscribe and hit that notification bell. And of course if you are looking to become a homeowner or you know someone who should be, we would absolutely love to talk to you or them. Definitely hit us up. We'll see you again real soon.

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