June 2022 Market Update

Hi Friends, 

I hope you’re enjoying the warm weather and loving where you live! 

It’s been an eventful few months in the L.A. real estate market and an exciting month at the office as I launched Cumbre Alta - a trophy ocean view property perched over the Pacific, closed an off-market deal on a Westside fixer, and launched lease listings in Santa Monica and Montecito. So grateful that I get to help my clients make moves! 

So what’s happening in the Real Estate Market? A Return to Normal?

• Well-priced properties are still attracting multiple offers
• Inventory is ticking up but still not to Pre-Pandemic levels
• Rates are up
• Prices are up 

Things are changing but it is still a hot market! We’ve seen aggressive price gains outperforming inflation numbers. Everyone is adjusting to the interest rate arrow pointing up rather than down (read more here). We are getting signals these rate hikes will continue to increase in an effort to fight inflation. Rate hikes mean higher holding costs for our financed buyers, and a reminder that the current rates are still historically low and below the 30-year average. Click here to see how rate hikes affect your home buying budget. I view the rate increases as healthy for the market as they will help get us to more of an equilibrium. 

Clients have asked if I think the market will “crash” now that the rates have bumped up, and my answer to that with is that’s just not what the current data is saying. To get to a crash in a real estate cycle we need what is called “hypersupply,” and friends, a correction to the current LA inventory numbers will likely return us to a more balanced market. However, this week I did notice an inventory increase which indicates the rate hikes are doing what the Fed intended them to go - stabilizing the market. Increased supply this week is still UNDER pre-pandemic inventory numbers. With increased options for buyers we will start to see 1-4 offers like the good old days of 2019 instead of the 12-20 I’ve been seeing consistently over the last year. 

Looking at the year ahead I expect to see the market recalibrate itself. Buyers are asking me if they should buy now or wait - my answer is with the rate hikes and increased inventory your monthly payment could be even more in a few months so if you find a house you love, see the chart here go for it! Timing the market is actually impossible, but get in there and start building equity. Savvy Sellers who realize the increased cost of mortgages will cut into their buyer’s purchase power are listing their properties now as inventory numbers begin ticking up. 

Inventory has been constrained for two years due to super low refi rates, the mortgage moratorium, and work from home options so we have some work to do to get to normal. Sellers who would like a change are asking themselves “But where will I go?” Read my tips for selling and buying at the same time here. 

Do you love where you live? Is your home helping you optimize for joy and community? My wish for you is yes! 

Warm Wishes, 

Stormie