It's been a rough ride in housing, especially compared to the years before when multiple offers were the norm. But we're no longer in a pandemic, we're still in recovery from the fall-out.
On top of that, interest rates have remained high and job security is at an all-time low since the dot com bubble days.
Housing prices have dipped about 0.4% on average since 2024 and is expected to stay flat until the middle of 2026, when further interest rate drops should help pick things up.
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.
Interest rates may not go down for a while, and buyers are taking advantage of the softening market before it begins to head up again.
Some buyers are waiting it out, seeing if the market will implode like it's 2009. But that doesn't seem to be happening while supply remains tight.
I don't know anyone who is giving up their 30-year fixed 2.5% interest rate anytime soon.
The window to sell is closing, so you want to get the place listed asap if you want to cash out this year. The rule of thumb is to have the place listed now, so you have time to get offers and into escrow by August. That way, you close on the sale before activity really starts to die down.
What to do to prepare to sell, in order of priority
1. Declutter
2. Paint the entire place, including ceilings and cabinets, if needed
3. Change out simple and easy things like faucets, cabinet hardware
4. Refresh bathrooms with a nice new mirror
5. Stage an empty place
6. Replace vanity in bathroom
7. Replace kitchen cabinets if within budget
The suburbs are going crazy with multiple offers and way over-bids. A recent 2 bed 2 bath Mt. Washington house went from $995k to a final sale price of $1.485M. The activity in DTLA has been mellow since the middle of 2020, and now it's starting to pick up. Buyers who are still hardcore about walkability and centrality are taking advantage of the lack of bidding wars in an area that is still exciting, and where there's development happening in the background. And the best kept secret: The highest concentration of Mills Act Buildings and residences in all of LA.
Recent Sales in DTLA of unique properties:
Textile Lofts #405 - Cutest light-filled corner unit in the fashion district. Parking, storage unit, and Mills Act! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-585120
Textile Lofts #404 - Cutest light-filled corner unit in the fashion district. Parking, storage unit, and Mills Act! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-585120
Flower Street Lofts #312 - Craziest price/sf in South Park. Includes 2 parking spaces. Amazing deal. https://www.themls.com/mlslistingphoto/listing/slideshow/#/AR20193757MR
Rowan Lofts #102 - Sexy 2-story, 2 bath loft with rare outdoor space, one of only a dozen! And Mills Act! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-610336
Recently in escrow:
Barker Block Lofts #502 - Someone got a deal on 1330sf! https://www.themls.com/mlslistingphoto/listing/slideshow/#/19-524406
Higgins Loft #1001 - Penthouse loft, these are almost never on sale. Private rooftop patio. Mills Act too. https://www.themls.com/mlslistingphoto/listing/slideshow/#/21-682076
Available for sale:
1100 Wilshire #1705 & 1706 - Rarely on the market, only 5 of these with a terrace in the entire building! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-622374
https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-660640
Douglas Loft #4D - Charming, includes rare underground parking space, Mills Act. https://www.themls.com/mlslistingphoto/listing/slideshow/#/21-685716
Molino Loft #113 - Arts District gem with a patio! Nearly 1800sf! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-635760
Eckardt Loft #707 - Top floor unit in a Mills Act Building! https://www.themls.com/mlslistingphoto/listing/slideshow/#/21-677502
Elleven #1006 - Beautifully maintain loft in a top notch LEED certified building in South Park. https://www.themls.com/mlslistingphoto/listing/slideshow/#/21-682634
Eastern Columbia Loft #1210 - First time on the market, 4-level penthouse in Mills Act gem. https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-652400
Pan American Loft #509 - First time on the market, rare Mill Act penthouse with private rooftop patio. https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-655240
Bartlett Loft #1402 - Another Mills Act loft with a private rooftop patio! https://www.themls.com/mlslistingphoto/listing/slideshow/#/20-595482
While the suburbs and inner burbs are performing the best, some savvy buyers are snapping up prime property deals in cities like NYC and DTLA.
Recent sales in DTLA:
