Showing posts with label best time to buy. Show all posts
Showing posts with label best time to buy. Show all posts

Monday, July 14, 2025

We're In the Most Dysfunctional Market

Seriously, so many people are shaking their heads at this market. Sellers are boggled that well-priced homes are not flying off the shelves (they're selling, but surprisingly slower than expected), Buyers are flummoxed that prices aren't crashing, interest rates are still nearly triple the past 5-year low, and even while inventory is rising, prices aren't plummeting. 

That's because when you think about it, nothing has really changed in the past 24 months. Interest rates are still high, most Sellers are NOT unleashing since they are happy in their post-COVID homes and even happier with the 2.8% mortgage rate, and inventory is still historically very low. We've been in a weird market where neither side needs to or wants to budge. 

But one thing is for sure, right now, Buyers have more of an upper hand than Sellers because they can offer less, or just walk away. Sellers are at the mercy of buyers (unless it's a hot property) and are often willing to negotiate. A recent buyer I represented got their escrow fees paid by the Seller--that was about 10K that the Seller just agreed to pay to get the deal done. Not possible 3 years ago.

And right now, Landlords are gaining the upper hand too. Rents are climbing, the cost of living is climbing, and renters either have to downgrade their place to match the rents they want or pay the annual rent increases where they currently are. 

Renters always forget that they don't have a 30-year fixed rent, they have a 12-month fixed rent and that's pretty destabilizing in my opinion. This is another reason why I'm seeing more couples and roommates shacking up to offset costs. Why pay $2500/mo each for a mediocre apartment when you can pay $2000/mo each for a much nicer $4000/mo 2 bedroom in a nicer building and possibly better area?

So what to do? If you're a Seller, price it right and sell so you can use your funds to do what you want to do. Otherwise, hold until the market goes up, because it always does. If you're a Buyer, buy now while things are negotiable. Remember, the mortgage rates can drop and you can always refinance, but the price is the price. Landlords, hold on to those precious rentals, especially in prime buildings and ones in which you have good Renters. Renters, you should consider buying if you're sick of rents increasing each year, and start gaining some equity which equals wealth.

Tuesday, April 1, 2025

Market Has Noticeably Slowed Down. But Who's Selling? Who's Buying?

The headlines change daily, causing chaos, fear and uncertainty. But the effect is clear: Buyers and Sellers are afraid. It's understandable. We know there are going to be effects from tariffs, more inflation, and cost of goods rising. We also know that this affects real estate as the cost of materials and building go up. So while there may not be a flurry of buyers, the prices are not expected to crash. We still have way too many people locked in below 3%, and too many people who bought 10-15 years ago who have too much equity.

So Who's Buying Right Now?

- Pent up buyers who have been waiting over 12-18 months for interest rates to drop, and don't see that happening are just going for it.
- Renters in the $4000-$7000/mo bracket) who have seen their rents rise year over year are also starting to look at smaller homes and a hedge against inflation.
- 1031 Exchange Investors
- People who need to diversify while the stock market remains volatile

Who's Selling Right Now?

Sellers who bought in the past 18-24 months who are locked in at 6-7% and sellers who have a lot of equity--those who bought between 2009-2013, are starting to sell. The psychology is interesting since owners locked into <3% mortgage rates are not selling--it's like they don't want to let go of their unicorn rate. (Note: the average 30yr interest rate since the 1970s is 7.75%. Not vastly different from today's rate of 6.69%, so yes, rates under 3% is unheard of). 

Thursday, April 11, 2024

Best Time to Buy - When Rates Are High, When Market Crashes, 20 Years Ago

If you can't see that a market has crashed, or can't stomach rates that have doubled since last year, and missed the boat 20 years ago, then you're not ready to buy, and may never buy.

But fortune favors the brave, because those who bought back in the 90s when rates were about 8.5%, were rewarded very handsomely whether they sold at the 2007 height, or kept the property, refinanced in 2005, then again in 2021, or ended up selling in 2021-2022 and used those doubled profits to buy a house of their dreams with a huge down payment in 2024. So while it's difficult to time the market exactly, you can indeed "play" the real estate market and win.



Friday, November 17, 2023

1 in 3 Buyers in Major US Cities Made All-Cash Purchases

7% interest rates? Not a thing for 1 in 3 buyers. According to Redfin, a large amount of homes were purchased with cash. No doubt many of these buyers will refinance once the rates drop.

Monday, July 19, 2021

State of the Market - Crash Looming?

We're half way through the year, pandemic still going, stocks are up, real estate is still buoyant, cost of goods increasing every day. These are chaotic and unstable things going on, but one fact remains, which is that people need places to live. And as the job market continues to pick up, people are moving around, upsizing, downsizing, and changing their surroundings. 

So the big questions:

1. Is there a bubble? - YES. Of course this is a bubble. Multiple offers. Love letters to sellers. As-is. All cash. 

2. Will there be a crash? - PROBABLY. But most likely, it will be a small correction rather than a crash, and it might be a miniscule. WHEN? Likely in 2-3 years. Once all the buyers who accelerated their buying timelines have gone, those who come out to sell will find that there's less demand out there. This will result in some price corrections. But again, I don't see it being big enough to matter in a place like LA. 

3. Hold or sell? - Hold if you've got 5-8 years to hold on. Sell if you're needing to unleash in the next 1-2 years. 

4.  Buy or wait? - If you have a downpayment, buy. Inflation is killing your savings and interest rates are so low, it's practically free money. Only wait if you don't have enough down or you're not prequalified. Otherwise, diversify your investments with stocks, a property, and maybe some crypto if you're risk tolerant.

Saturday, August 29, 2020

Good Buys in DTLA Right Now

Higgins #207

French doors to a 150sf private patio. There are only about 40 units in the whole of DTLA with a patio so spacious. The interior is 1250sf. The unit also benefits from huge property tax savings from the Mills Act status of the building. $699k for a piece of history in the former Edison office building.

Courtesy of Coldwell Banker DTLA


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Grand Lofts #708

Penthouse unit, 1110sf, balcony, $800k, yep a penthouse with 2 beds, 2 baths and 2 parking spaces for under a mil, in SOUTH PARK. Grand Lofts #708

Courtesy of The Agency


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Eastern Columbia Lofts #311

A totally unique unit with 14-feet ceilings that only a few units feature, corner loft, plaster crown molding, balcony, 2 bathrooms, rare storage unit in the building, 1 parking space. The interior is 1740sf. The unit also benefits from huge property tax savings from the Mills Act status of the building. $1.898k for this pristine unit at the only Zig Zag Art Deco building in DTLA. 

Courtesy of Coldwell Banker DTLA


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Textile Lofts #404

A corner pied a terre with so much light for under 500k? Mills Act too? And 1 storage unit and 1 parking space. 640sf. The unit also benefits from huge property tax savings from the Mills Act status of the building. $468k for this very cool little unit.

Courtesy of Coldwell Banker DTLA


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Douglas Lofts #4D

Charming open plan loft at the historic Douglas Building. Mills Act too, and 1 underground parking space IN THE BUILDING! 740sf. The unit benefits from huge property tax savings from the Mills Act status of the building. $549k.

Courtesy of Coldwell Banker DTLA


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Elleven #615

LEED certified building in SOUTH PARK! 1670sf.  Immaculate 2 bed, 2 baths, 2 parking spaces! $998k.

Courtesy of Keller Williams

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1100 Wilshire #2412

View of the Hollywood sign and the ocean! 12-feet ceilings, walk in closet, 2 parking spaces IN THE BUILDING! 790sf. $535k. Plus it has one of the most amazing pool decks in the whole of DTLA.

Courtesy of REH Real Estate