The Calmest It Will EVER Get?

Hello, everybody. This is the episode where getting new school shoes is a perfect metaphor for the present housing market. If you are a first time homebuyer, let's go ahead and get started. So my name is Stephen Meade with Domicile Real Estate where we are on a mission to help California's renters become homeowners.

Why is the present housing market a lot like getting new school shoes, I don't know if you were at all like me. But when I was a kid, my mom or dad would take me to the mall. And we would go from one end to the other, stopping at every shoe store along the way. And guess what, every time I was in a shoe store, and I saw a pair of shoes that I liked, my biggest fear was that if I get those shoes now, I'm going to see a better pair of shoes later. And so that future fear of disappointment ruined my enjoyment in the present. And I think a lot of that is what's going on in the housing market right now for first time homebuyers. And that's why we're calling this is this market as calm as it's going to get?

Well guess what, this is a remarkably calm spring, in terms of supply and demand being I don't know, at least kind of closer in balance with one another. But it's a careful and delicate balance. And it's very possible that it could change at any time. And I think the question is, are we in a situation where it's pretty good? Or is it a situation that you should wait and not enjoy the present and worry? Am I going to be disappointed that might be something better around the corner? Let's go through the stats and talk about it. By the way, also, we have coming up, you're gonna see the scription down below our latest webinar, which is how to buy and renovate your first home when you do not have rich parents.

So definitely you want to sign up for that there is a link down below, you can go ahead and do that. Let's get started with our stats. So looking here at closed prices, so it's a little bit of a different story whether you are a condo buyer, or if you are an entry level single family home buyer. Just a reminder, the stats for Los Angeles and Orange counties. And this is the first quartile. So basically, we look at the blue chart, all those three bedroom, two bath homes that are for sale, we look at the first quartile price that is halfway between the bottom and the median.

And then we do the same thing for entry level condos, except those are a two bedroom, two bath and as you can see here, we've really seen some price growth here kind of trending upward for those entry level single family homes. I think we're right about in that kind of $800,000 zone. As of right now. We are close to $580,000 for those condos. And if you had been watching this podcast if you've been listening to me doing these market updates, one of the things I've frequently talked about is that if you can afford to get into a single family home you should they are a limited quantity that traditional single family home layout with a yard it is a dying breed those homes will be dinosaurs, they will only be affordable to rich people.

So if you can get in on one of those now you're in a better spot. Okay, let's look at our payment. Fortunately, rates have risen back but they haven't risen back nearly as much as they could have. So if our peak payment for an entry level single family home was 6748. Right now we're only at about 6500 So we're not actually hitting the peak number similar story for our condo. So to be honest, this is good news. Right? If you thought around October of last year, you've missed your opportunity. Well guess what things are better for you today as a buyer versus what they were in October of last year so you have not missed the boat. Minimum household income required.

We're at about 159,000 for entry level single family home again this is with no other debts in your household and based on 5% down and then we are at about $120,000 for that entry level condo. Here is a another reason things are actually pretty good and calmer than you might think. This is our 14 Day absorption rate you'll notice what 82% for entry level single family homes and 76% for our entry avocados. These are not insanely high numbers. Now they are high numbers compared to pre pandemic Right. Definitely still a seller's market for the most part but not a crazy circus level seller's market so definitely some good news on that front if you're a first time homebuyer total inventory.

Another little bit of good news, guess what we our inventory is at about the same spot for entry level single family homes as it was at this point last year. Now again, I'm going to tell you, if you look at this graph, you're going to notice something. If we go all the way back to last year on the left side of that graph there, you'll notice that it was trending downward. And here we are trending upward. Now the question is, is that because more sellers have decided to the market this year? Or is it because spring has come a little bit early, it is still a little too soon to tell.

I think it might be a little bit of both. And a similar story in condos, except you actually have more inventory than we had last year. And we look again, at our 14 day, still active percentage remember on this chart, lower means a more competitive market. Higher means a less competitive market, you'll actually see that for the most part, things are about in the same zone as they were last year. And for condos, I think things are actually a little bit better than they were at last year. So the same or better as last year. And then finally, we've got our weeks supply of homes, this takes that relative look at the number of homes available in the market.

So if our total inventory is back here, total inventory, this is just an absolute number you got maybe what like 13 1400 houses in LA and Orange County's other three bedroom, two bath. If we go down here on a week supply of homes, this looks at the rate at which people are buying homes. And it says nothing new came on the market. How soon would we run out of houses? It is slightly worse this year than it was last year at 4.77 weeks versus 4.92. I think that's kind of within the margin of error. But things are actually better on that condo front.

So what is the flip side of this single family versus condo discussion? Well, the flip side is I do think the long term appreciation opportunities on single family homes are great is because you will not be able to buy them so easily. However, I also think the kind of markets a little softer. And if that's your budget range, you've got a great opportunity. Anyhow, kind of some interesting perspective on the market. Is this as calm as it's going to get? I don't know. But I actually think this feels a bit like the new normal. It feels like a time when things are not completely weird and up in the air.

Honestly, I think it's a really nice little bit of relief, a respite from the post pandemic market that we have seen and maybe settling into a little bit of a new normal, though remember, interest rate drops, lots of other factors could kind of up into this very delicate balance that we have. What is available today may not be available tomorrow. Also stay tuned later this week. We are going to do a video, the lawsuits. How does this affect you especially as a first time homebuyer, we are going to go ahead and release a video I think probably Thursday or Friday of this week. So absolutely stay tuned. You definitely want to like subscribe and hit that notification bell. You'll see that when it comes and then obviously if you are looking to buy your first home here in Southern California, or if you know someone who has, we would absolutely love to hear from you. Questions and comments. We'd love them. We'll see you again real soon.

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