2021 has been one of the fastest-moving and craziest real estate markets I’ve ever seen in all my years in this business. Los Angeles, like almost every other market in the country, is a red hot seller’s market. Homes are selling at record speeds and at higher than asking prices. I think we’ll see these same trends continue through the summer market and maybe throughout the rest of the year.
Will it Continue to Be a Seller’s Market?
It will remain a seller’s market as long as there are more buyers than sellers. That seems like it will be the case for some time as housing inventory is extremely low. There is huge buyer demand. Mortgage rates have crept up a little in recent months, but they are still very low by historic standards. This gives buyers more buying power and sellers are benefitting as home prices continue to soar.
How Will Inflation Affect the Market?
One thing to look out for is inflation. The Federal Reserve recently increased its inflation forecast for 2021 from 1.8% back in December to 2.2% in March. This may impact mortgage interest rates later in the year and that could slow down the buyer demand and home prices a little. However, I just don’t see any major changes from what we’re experiencing in this insane seller’s market right now.
How Long Should it Take to Sell My House?
Properties have been selling in record time and, in many cases, way above the asking prices. Buyers are coming in with ultra-aggressive offers and bidding wars are common on desirable homes. I’ve had more than one situation this year where a house has brought in $1 million or more over asking!
I’ve been telling my clients that if their home is on the market for more than a couple weeks without being in contract, something is wrong. It is usually because of overpricing. Sellers see the dollar signs in their eyes with such a hot market and they go too far overboard with an unrealistic price. The best strategy is always to set an asking price that will draw in more buyers. You don’t want to go too low and get a bunch of weak offers that will waste your time. You want to find the “sweet spot” where buyers will be interested and see a fair price. Then, you let multiple offers come in and, more often than not, you will sell well above your asking price. Let the aggressive buyers drive the price up for you.
How Can a Home Seller Prepare?
A home seller should still also take the time and make the effort to present their property in its best light. I’m talking about keeping it clean, hiring a professional home stager and working with a real estate professional who can a provide top-notch marketing plan. This will help attract more buyers and even more attractive offers as you look to maximize your return. The fact the market is moving so quickly is the reason you need to be properly prepared as a seller.
How Can a Home Buyer Prepare?
On the other side of the coin, buyers have to be ready to act. You don’t have much time to weigh your options and think about your offers. You have to make sure you are writing very strong offers or the sellers won’t even take you seriously when there are many other aggressive offers already on the table. Get your financing in order and have a pre-approval letter from a reputable lender. Be prepared to make some sacrifices and/or pay a little more than you expect. If you are selling and buying simultaneously, make sure you have a clear plan and work out the tricky contractual timing so as not to derail either transaction.
As a home buyer in 2021, you need to move quickly and aggressively. At the same time, you have to move wisely. Don’t give up more than you are comfortable giving up. Be careful not to overpay and get yourself in a bad situation. Be wary of waiving home inspections and other important processes just to ensure a quicker sale. The seller is definitely at an advantage in today’s market, but that doesn’t mean you should be foolish with your offers. I never encourage non-contingent offers. However, I am seeing those more and more often. It is a questionable strategy that should only be considered if you are really desperate to buy a certain home.
Are People Leaving California?
There has been a lot of talk lately about people leaving California and moving to lower-tax states. I have seen plenty of this, but I am also seeing plenty of new residents coming to Southern California. There isn’t a “mass exodus” like some news outlets claim and our real estate market remains one of the most desirable in the country. In Los Angeles, I am seeing some more migration to the east toward the San Gabriel Valley and even out toward the Inland Empire.
What Are the Latest Home Design Trends?
As far as home design trends, the pandemic has definitely had its impact. The “open concept” style has slowed in favor of more defined interior spaces. More people are working and schooling from home, whether part-time or full-time. This remote lifestyle isn’t going away anytime soon. People are looking for dedicated spaces that can be used as home offices, home gyms and home classrooms. There has also been increased appeal for outdoor spaces. Properties with larger yards and pools are attracting the most attention.
This is an exciting time to be in Los Angeles real estate. This is going to be one insane summer market and I can’t wait to see what happens next!
If you are planning to buy or sell soon in Los Angeles or the San Gabriel Valley, start getting prepared as soon as possible. Contact The Durkovic Group today for an introductory consultation and take the necessary first steps for a successful move.