March 3, 2021
By Saeed Ghaffari
Saeed is the founder of Money, Real Estate & More. With over 30 years of experience as a lender, investor and a real estate professional, he provides free consulting in these fields. To connect with Saeed, sign up for free / log in on moreandmorenetwork.com and send him a private message.
So Cal Market Beat
MLS Data provided courtesy of Real Estate Legends, USA
Table below shows the impact of the market trends and factors on our economy, ECON 101.
Buyer, Seller & Investor Tips
- Buyers: The new listings were up only 2.23%, but so are interest rates. One would think the higher rates and more new listings would bring some pressure on sellers to show more flexibility on their price and terms. But the active listings were down, indicating the properties are moving towards closing much faster than the rate they are coming to the market. Be ready to pay premium prices if you are buying now.
- Sellers: Despite the hike on interest rates, strong closing volume and the increase in coming soon listings, realtors are seeing a strong seller market across the So Cal. The hike in interest rates will lower definitely be of concern if the trend continues.
- Long Term: Go for it. Take advantage of the lower rates.
- Short to Mid Term: There are good deals out there and most likely more to come. Get your finances ready and work with experienced agents.
- Everyone: Money is important, but it’s not everything. While you protect your financial interest, be sure to build good will with people you do business with.
- Buyers, Sellers & Investors: Seek the advice of an experienced local realtor for data specific to your market. Work with realtors with skills and character you can count on.
Active Inventory listings dropped by .18%, last week it showed it had a drop of 2.04%, while the final result is in favor of sellers, the trend advantages buyers.
New Listings moving up, old listing moving on, music to the realtors’ ears. A very active market, good for the economy.
Percentage of new listings to active listings stay flat with a slight uptick. With new listings going down, it means new listings are replacing them with even a higher rate. Old listings going down is an indication of a) price adjustment by sellers or b) more demand on the market.
Coming Soon inventory was down by 1.95% from the week before, the opposite of the week before that showing a 11.49% increase. Less inventory means less flexibility by sellers.
Closings went up by 22.9%, more than 7 time the week before that of 2.66%. Good for everyone and congratulations to all buyers, sellers, agents and service providers.
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California Buyers Still Can’t Afford Homes
The issue for California residential real estate remains the same. Poor affordability means that despite latent demand, buyers can’t afford the prices of homes in the Golden State. For that reason, many have left to find much cheaper homes in other states. Unemployment will likely be on the rise along with lower business profitability (tech sector continues to lay off workers) which means fewer buyers are likely for 3 to 6 months.
The stronger consumer optimism is running against sticky inflation and a likelihood the FED can’t lower interest rates. But will that discourage buyers in California? Demand is always intense in CA. No other place offers what California has, and buyers today do seem to put lifestyle at the top of their list.
The luxury housing market, like most other real estate sectors, is adjusting to a slowdown. Affordability and home size are every bit as much on wealthy buyers’ minds as other consumers. “The reality is we are coming out of one of the best real estate markets in history,” Gary Gold, a luxury property specialist with Coldwell Banker Realty in Beverly Hills, Calif., notes in the latest Coldwell Banker Global Luxury Trends Report. “But that level of demand and price appreciation wasn’t sustainable.”
Nearly 90% of respondents to the Coldwell Banker survey say they believe the real estate market will be better than or the same as 2022 for property investment. The following emerging trends were noted in the report.