Those of you trying to sell a house are probably already feel the change. We have been talking about it here in the office for a few months, showings slowing down, offers slowing down, more price reductions happening. We are starting to see it in the numbers.
Since homes are often under contract for one, two, three or more months, it takes time for the pricing and velocity to adjust. Which is why agents “feel” the slow down before the numbers reflect it.
The Orange County Record posted an article earlier this week stating that “single family homes fell 17.6% in the five county Los Angeles metro area.” That is a big drop. It is well known that we get a big influx of people from the the Los Angeles area and the Bay Area. This is likely, in part, causing our slow down. If they can’t sell their house then they wont be purchasing another one.
According to ABC 7 News, the Bay Area is seeing a market correction too. The predictions for 2019, according to this article, are an increase in pricing and an increase in inventory. People are looking for quality and willing to wait for the right house to come along.
According to the California Association of Realtors 2019 California Housing Market Forecast: high home prices and affordability will contribute to a weaker housing market in 2019, and 2018 as home sales will register lower for the first time in four years. There will be a modest decline in existing single-family home sales of 3.3 percent next year to reach 396,800 units, down from the projected 2018 sales figure of 410,460. The 2018 figure is 3.2 percent lower compared with the 424,100 pace of homes sold in 2017.
The changes can be attributed to a number of items: rising interest rates, changes in tax laws, the looming election panic over Proposition 10 (rent control). Maybe it’s a little bit of everything.
The real estate marked is always changing and evolving. Unfortunately, we find the peak of the market and the bottom of the market after they have already passed and it is nearly impossible to time it perfectly. The information above is great news for prospective home buyers who are scrimping and saving for their first home purchase. But it is’t very comforting for those who are hoping to sell and then buy. Seller’s can’t “push” the market anymore. Sellers need to be well positioned with the house that is dialed in and priced well in order to move it fast.
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