We Told You So, Pt 2
Hello, everybody and welcome to a another Southern California first time buyer market update. My name is Stephen Meade, I'm the managing broker here at domicile real estate where we are on a mission to help California's renters become homeowners. And we're calling this one, "I told you so, part two", this isn't really a video that we are terribly thrilled to make. And I think the reason for that, and before I start is, you know, we don't want to be in a position of telling people that if you if you don't really make a plan to become a homeowner, it's it's not going to happen and things are gonna get worse for you. But that's exactly the kind of video basically, that we're making.
You know, a lot of people who in the last six months said, we're going to sit, we're going to wait, you know, and that really hasn't worked out for these people very well. Their payments are up, they can afford less. And this week, we're going to show you that prices actually bounced back. So it's not all about news, though, I want you to stay tuned to the end, there is some good news, there's some signs a that this is not going to get much worse at least. And there is something we've got kind of a fun announcement, something we've been working on for a while and it is finally coming to fruition. And we're really excited and happy to share that with you.
So let's go ahead, let's get started. And we're gonna go through what's really going on in that southern California Housing market right now, if you're an entry level or a first time homebuyer. So, first off, let's start with prices. This is the news, I think that we were expecting or that I told you to expect. And I think a lot of you a couple of you wrote me privately saying I was crazy, and that that wasn't going to happen. But here we are, you know, this is, this is really the highest closed price that we've seen in our measurements. Really, honestly, since all the way back in, you know, beginning of October of last year.
So if you look at this chart, this is definitely a big jump from where we were, you know, two weeks ago. And we see that it is also on the condo front. If we're looking at condos, we've not seen a price. This high in the condo world. Since all the way back in June of last year, you might be looking at things in the newspaper saying but hey, your view your prices and this. That's all true. But this is data that is actually for Los Angeles and Orange counties, and it is towards the entry level end of the market.
As always, our blue line indicates an entry level single family detached home, three bedroom, two bath, and our red line indicates an entry level condo, two bedroom and two bath. And, you know, these are first quartile prices, meaning we take halfway between the bottom and the median. And that's meant to represent sort of an entry level price category in LA and Orange counties. And you know, this data is four to six weeks old. I actually think these numbers have tempered out a bit but I don't think they really dropped from this point. I think they did bounce back a little bit. If we look, what does that mean, including where mortgage rates are, that means we're now back to 5782. That's about where we were in November in terms of payments. You know, we're still less than where we were in June of last year.
So it's not all bad news. But you know, I don't like the direction and the trajectory of this before looking here at our payment on our entry level condo that is about where we were last October. And other than that this is really the highest point we've seen. For those entry level condos. Really at any point we weren't at any point that last year. One of the things I've talked about for a long time is that really condos are finally coming into their own. And condos always treated as this kind of like redheaded stepchild as it were in the real estate world. And now I think condos are really a viable alternative for people.
There are people that say I always want to live in a condo. And I don't think that was really true in the past. If we look at our household income required on that, you know, entry level single family home were at 141 603. And for our condo, we're at 115 949. You know, again, this is meant to represent sort of a based on 5% Down with no other debts. Obviously, if your situation is more of a down payment, things would be less different for you and you wouldn't nearly need nearly as much income to qualify. I want to talk about our absorption rate. And this is really why we're seeing what we're seeing. You know, one of the comments that we get a lot of times either privately or just in person people will come up to us and ask about this. They'll say how is it possible that with rates going up the prices have not come down to sort of meet, meet, that sort of reduction in demand. And this chart really is going to explain the reason why that is.
Despite sort of maybe, I think intuitive belief. You know, prices are not really based on reasonableness what they are based on, there's no inherent, how much is a house really worth. Rather, you know, real estate prices are based on supply and demand. That sounds like an entry level econ class. And it is, but it's the truth. And so this measurement tells you about our absorption rate. And what this is measuring is it says, okay, for how many homes came on the market, how many homes left the market to go under contract, right.
So in the last two weeks, for both our entry level condo and our entry level, single family, and for both of these, there were roughly the same number of homes coming on the market as going into escrow. And that's a problem because that means you're really losing inventory. And the reason you're losing inventory is this doesn't even account for homes that were pulled from the market where somebody decided not to sell, or were in a listing expired, and it didn't come back on. So there's a certain amount of kind of breakage, right? That is never really a sale anyway. And so that means we are in a situation where there are more people buying than there are selling in any given week. And that's both true for condos. And for single family homes.
In what's nuts about this is, this has been true, fundamentally for the last six weeks. So this isn't a transient peak, right? This is a real number that's out there and look at where we are compared to last year. And that's the reason why we're seeing prices that are very, very resilient. So rate increases and payment increases. And this is the other story, right? This is the thing that's I told you. So part two, this is our total inventory. And you know, if you look at this right, and this one I apologize are the we've got our lines in reverse the red is entry level ceiling looms, the blue is condos should probably fix that.
You know, yes, it's true that on our single condos, we do have a lot more than we had last year, like like really a multiple, right there was like nothing for sale. But look at this numbers sloping down and then look at what this number is for our entry level single family homes. Right. And this is the one that I think, to me should really tell you everything you need to know. Last year, we were roughly at 1100 homes active and growing. This year, we are at maybe 1400 1400 50 homes and falling. We are only up 30% In absolute inventory versus where we were at this point last year. And by the way, as a reminder, where were we at this point last year, there were no houses for sale.
So you know, in absolute inventory terms, inventory is dropping, I've really never seen a spring like this. And my gut feeling is this means prices will either be resistant to falling. Or they may even increase slightly right. But it's not going to be huge movements. I don't think if we look at our percent still active, this is the one piece of news that I think is maybe a little bit of good news, right is this graph is the inverse of competitiveness. So when this falls, the market gets more competitive when it goes up, it's less competitive. We did see things falling pretty drastically and they still are for our entry level single family homes. But for a condo, they seem to have stabilized a little bit down here. So you know, in that sense, it looks like things might be smoothing out a little bit. And I hope they are right.
You know, people say that the realtors must love crazy markets. But the reality is we actually like stable markets. Stable markets are what's great for buyers and sellers alike and reduce the amount of drama in transactions. This is our relative inventory chart. And this is the other one that really I think tells you all you need to know when you're out there in the marketplace bidding on houses. Right now we have about five weeks of inventory and entry level single family homes and six weeks of inventory of entry level condos. And what's remarkable about this is just how much lower this is than it really has been for most of 2022 these numbers are starting to look a lot more like the numbers of late spring 2022.
And so if you're out there in the marketplace, and it feels busier and it feels like there are more people in every open house, you're not imagining things. It's true. If we didn't get any new listings, we would be out of houses within five or six weeks at the rate they are going into escrow. That is a very brisk market. So when people talk about speed of the market, right brisk or slow, fast or slow? This is really the number they're talking about is how many weeks of inventory do we have? How fast would inventory be depleted if we didn't keep adding to it? 10:12 So that's kind of the bad news side of this.
And, you know, I think if you're out there watching this, this might seem pretty doom and gloom, like, I'm never gonna get a house. But, you know, a program, and we've mentioned it before, but we've really done a deep dive into it. And we're gonna put a link down below, we have a mini guide coming out that you can download. And we're going to probably be doing a short webinar on this thing like 15 to 30 minutes in the future, because I think this is really important.
The City of Los Angeles wants to give you money to buy a house, really, they do, they want to give you money. And unlike many other programs, which are severely income restricted, this one is actually designed for moderate and middle income borrowers. So there are there are households with over $100,000 of income that will qualify for this program. And they don't just want to give you a little money like three or four or $10,000. They want to give you a lot of money up to $115,000. In some cases, the only rule is that you have to buy a property in the city of Los Angeles, there's a couple other little rules, but that's really the big one. But a lot of people don't realize that a lot of neighborhoods that you may have thought were their own cities or not. They're actually part of Los Angeles, places like San Pedro, Tarzana, North Hollywood, these are actually all neighborhoods of Los Angeles, Sunland, Tujunga, areas like Glassell Park, Mount Washington. And these areas all qualify under this program.
So we're going to have a link to this program down below. If it's something you are interested in. We've got a mini guide that you can download and determine are you pre qualified for this program, we kind of give you the key specs that in five questions you can answer and determine whether this might be a program that's good for you. So we're gonna put that link down below. So there is a little bit of a lifeline and just to let you know, this money is game changing, because it can turn you from a you know, mortgage insurance, low downpayment buyer, or if you're a person who can't even buy at all because you don't have a down payment, this is what makes buying a home even possible for you.
So really, it's a very exciting program. We're super excited about it. And the link is down below. Definitely reach out if you'd like some more information on that and we will see you Oh yeah. Don't forget to like, subscribe, smash the crap out of that notification bell. Do all those things that YouTubers always tell you to do. If you are looking to be a first time buyer or an entry level buyer or you know someone who should be definitely reach out to us especially if you're in the Southern California area. And we will see you again real soon.