November 2023 Real Estate Market Report

November Housing Data

As we enter November, the inventory of unsold homes is rising, and listing prices are being reduced. This development is quite atypical for this time of year and naturally raises questions. Should this be a cause for concern?

The Real Estate Market is Entering a Phase of Normalization

This increase in unsold homes appears more like a market normalization than a sign of seller panic. More sellers entering the market could mean increased sales in 2024. The balance is key, however. Too many sellers could tip the scales, but currently, there's no indication of an excessive surplus.

When examining the real estate market, the combination of high home prices and record-low affordability might lead some to speculate about a potential downturn in the market, possibly resulting in lower home prices. However, this scenario is not reflective of the current market conditions. Presently, home prices are maintaining a steady level, and the rate of appreciation, while not as pronounced as during the pandemic, is stabilizing more consistently and sustainably.

Could This Signal the End of Limited Housing Inventory?

You might be asking if we're finally moving past the era of scarce housing inventory. The concise answer is not quite yet. Context matters here. Although some headlines indicate a rise in inventory, it's important to note that the current number of homes on the market is still considerably lower than what we'd expect in a more typical, balanced market scenario.

Is Housing Going To Crash?

Using terms like "worried" and "crash" can be sensitive, especially in real estate discussions. Acknowledging the possibility of a market slowdown or a change in the trend of home prices is not the same as predicting a crash. The first indicator of such a shift is an unusual increase in inventory, which we are nowhere near.

Spotting this early sign and bringing it to attention is precisely what should be done. It's about staying informed and prepared, not spreading alarm. As we navigate the real estate landscape, staying abreast of these trends and understanding their implications is key to making well-informed decisions.

Listing Price Reduction

Price reductions often have a limited impact on actual home values. Consider a house originally valued at $1,000,000. If the owner lists it at $1,050,000 and later cuts the price by $50,000, the house's value remains unchanged—it's simply a pricing strategy adjustment.

The current real estate market features many homes listed by owners who expected a low inventory environment to offset issues like outdated features or less desirable locations. However, with the market stabilizing, these homeowners recognize the need to realign their prices with market realities.

The Art of Accurate Pricing: Mastering Home Sales in Today's Market

This adjustment is beneficial for the housing market. It leads to a more realistic pricing landscape and increases the availability of affordable homes for prospective buyers, especially families looking to purchase a home.

In the current market, the key is to price your property correctly, aligning it with its true value. Despite the low inventory, sellers maintain significant leverage, but realistic pricing is crucial for success.

How important is a Real Estate Agent?

Many buyers report that their agent was the most valuable source of information during the home-buying process. A skilled realtor, well-versed in the latest market trends and deeply knowledgeable about their local area, plays a crucial role in the process of buying or selling a home. Such an agent not only comprehends current happenings but also excels in conveying this information effectively, ensuring a smooth transaction.

Conclusion

To achieve a notable decrease in prices, there must be a substantial increase in inventory, which isn't currently the case. Despite a slight rise in inventory and higher interest rates, well-priced homes are still selling. A proficient real estate agent can provide valuable guidance and help you navigate market fluctuations, ensuring you make informed decisions in your home purchase. Contact us if you are in the Los Angeles area.