How is SoCal Real Estate Market Doing as of November 2022 by Richard Uzelac
Orange County, LA, San Diego, Riverside, San Bernardino and Ventura Counties – all prices in the market are coming low yet, inventory is still not coming in huge and pending sales, under contract, or sold are still low? Well, it’s not really a surprise, because interest rates have been coming high and will continue to rise for a while according to sources..
Does this mean that it is a good time for investors to buy in southern California or are they just adjusting it because the interest rates from mortgages are soaring high. According to sources, the mortgage rates have soared to 7.7% from last year in October. This is from the Bureau of Labor Statistics report
According to some of these counties’ data gathered by Christian Walsh of Wire Associates, that the sales coming this year are cut in half compared from the last two years (2020).And that’s a huge drop although this is not the first time in history of the southern California market. As it’s always been wobbly basing from its trend over the couple of years way back from 2018, 2019, 2020, and 2021.However this data shows that sales are really unusually low for this time of the year and may still continue to go low as we are approaching November and December season (typically the time to which is not a good time to sell for homeowners)
Another source I found from a real estate agent in southern California, particularly in LA county, said that it’s not a good time for investing but probably next year. But I, Richard Uzelac say, that if you have the strategy in making money or a good business model, then why not take a risk. Real estate market trends in America, and I mean not only in southern California “SoCal” but as well as in other states, tend to go crazy. One day you are so lucky getting so much in return for the value of the property that you bought then maybe the next day or time of the year it’s not a good time for you to sell your house. As we come to say, nothing is permanent. And prices of houses are not written in stone. Moreover, considering that we have gone through so much in 2020: the pandemic and the high inflation rate going around the world and wars. We should make good decisions. As a business owner of multiple businesses and once a real estate agent, I could always say that investing in real estate is a good form of investment. And I’m not saying this for real estate agents in southern California to work out. But it is a fact that many would always say so and I couldn’t agree more to this.
What Real Estate Agent in Southern California “soCal” Should Know by Richard Uzelac
Let’s go back to economics and study law and demand. There are three things we should consider. One of them is the substitution effect. For example, let’s say that the median houses go up in southern California. In this case, people might turn away and look for another house that they might have the power to purchase or can afford, like maybe go look into a different state to look for cheap houses and buy. The second one is the income effect when the economy goes up for southern California, for example if we are to say that this high inflation and the whole pandemic situation didn’t happen and businesses are booming, people are going to buy more houses because they have more purchasing power. Hence, demand increases because this means people can probably afford it. While the third one is the law of diminishing marginal utility which would apply to those who already have high portfolios like landlords or rich people . As you buy and buy more houses you may be getting less satisfaction from it, like considering the cash flow from this place: are you getting income from it? Are you getting any tenants? Is the maintenance cost reasonable enough for you? I know you must have all the thoughts running around your head now with the fact that mortgages are high now and will even stay elevated as we continue experiencing high inflation.. But don’t lose hope, there are still some other reasons that people may still want to buy during this time. People also would assess the feasibility of the area, and their age, like is it a reasonable price for people in their retirement age or is this neighborhood friendly? Nevertheless, this still needs to show a good perspective for sellers even if it shows that the prices for median home houses are 6 percent less 🙂 and buyers should consider a satisfying reason for their decision when buying houses in Southern California.