Sales activity in January popped, but really, there was nowhere to go but up in many neighborhoods after a mostly dismal Q4:2018. As we approach our prime selling season the next 60-90 days will set the guidance going forward. The slowdown began last year after what many considered the peak of the market in March 2018. It was very noticeable throughout the November elections and Holiday season, magnifying a seasonally slower part of the sales cycle.
At the macro level, my opinion is that the market will go mostly sideways for the foreseeable future, up or down no more than 3-5% for properties closer to the median price range in their market area. Factors such as interest rates, season trends and inventory levels will drive the fluctuations. The stock market, not so much unless it tanks and stays down, which isn’t expected to happen. Buyers will have the luxury of being pickier about what they want, whereas in the previous few years they’d buy anything just to get their feet in the market.
If you’re a seller it’s a good time to sell. We are still at or close to peak prices after a solid 6+ year run of appreciation. However, the days of testing the market with “name your price” pricing are gone for now. We are seeing homes sit on the market longer, more list price reductions, and credit requests after property inspections. This is typical for a normal market.
If you’re a buyer it’s a good time to buy if you’re planning on holding long term. Rates are still super low. And don’t be hypersensitive about rates! A 0.50 increase in the rate on a $500k 30-year fixed loan will cost you less than $5.00 a day. What’s more important to you, your double caramel macchiado or owning the roof over your head and establishing a path to wealth thru equity building?! The economy looks strong, and lending guidelines have softened the past couple of years. 2020 elections could have an impact on our housing market. If we get an extreme political change my opinion is it will not bode well for the housing market. The important thing to know about our past market cycles is that for most areas in Southern California every new market high we hit was higher than the previous high. Our weather and job base remains the best in the nation and people want to live here!
If you’re planning on selling soon contact me for a free market valuation of your home and to see how I will guide you through a successful sale.