Several things have happened in the past few months. It's odd because it's a good time to sell, but it's also weirdly a good time to buy. Some of my thoughts and feedback from clients:
1. Interest rates have gone up. This has affected prices a tad. And yes, I mean only a tad. We're talking 1-3% price shavings from the summer. Meaning, prices are still very good if you're in the market to sell.
2. It's still a Seller's market, mainly because prices are still high and inventory is still low. So is it a good time to sell? Heck yes if you have equity or are needing to unleash.
3. While interest rates are hitting up to 5% depending the lender, I dare say it's still relatively cheap to borrow compared to 20 years ago. Interest rates are slated to go up a bit more in 2019, so that means if you are planning to buy in the next 6-12 months, now is probably a good time.
4. Rents are higher than ever. I can't believe the gorgeous 2+2 unit in a duplex I used to rent in Hancock Park 15 years ago for $1200/mo, is now renting for $4200/mo. That's about a 400% increase. What I mean to say, sadly, is that it's really hard to rent these days with prices so high. If your budget is under 3k, and you don't have a decent downpayment (10-20%) saved up, it's ok to keep renting. If your budget is about 4k, then it's probably better to think of buying something small in an up and coming area and holding on for 3-5 years, and then cashing out on the 100k+ equity you'll gain. Seriously, I believe the market will go up in certain areas while other areas will plateau.
5. Will the market keep going up 5-10% each year like it has since 2010? Likely no for the next 2-3 years. However, 5 years from now, some areas will. These are areas that are in transition, like West Adams, Glassell Park, Montecito Heights, Lincoln Heights, and the Fashion District & Art District in DTLA. There's just room to grow in these areas.
6. At the end of the day, real estate is about security, equity, and leverage, so whether you're selling to make a profit and trade up, or buying to build equity and peace of mind, if it's the right time for you, then that's all that matters.
