Los Angeles Real Estate in 2024: Buy Now or Wait

Navigating the Challenges of Los Angeles' Real Estate Market: Rising Rates and Soaring Prices

The current real estate market in Los Angeles is posing challenges for potential homebuyers. Rising mortgage rates and soaring home prices have led many buyers to believe it's not an ideal time to purchase a home in the area. However, experts have a more optimistic perspective, suggesting that real estate remains a strong investment option, with home prices continuing to rise.

One notable issue is the low inventory of available homes, with only about 2.2 months of supply remaining. This scarcity of housing options will likely maintain upward pressure on home prices in the coming months, making it a competitive market for buyers.

As Odeta Kushi, deputy chief economist for First American Financial Corporation, puts it.

“House prices reached a new peak in August. For those trying to buy a home, house price appreciation can be intimidating and makes the purchase more expensive, all else held equal. However, once the home is purchased, appreciation helps build equity and becomes a benefit rather than a cost. As potential first-time home buyers consider homeownership in today’s market, they should carefully weigh the costs of owning a home against the cost of renting.”

From Selma Hepp, Chief Economist for CoreLogic, this afternoon:

“…given the continued rise of borrowing costs in 2023, it is remarkable to see how resilient home price growth has been in recent months, with September’s 0.3% month-over-month gain lining up with pre-pandemic trends. Nevertheless, as mortgage rates significantly impact affordability, certain markets with continued in-migration from more expensive states show renewed buoyancy and outsized monthly price gains.”

Making Informed Decisions in the Uncertain Housing Market

In today's housing market, many people are feeling uncertain and nervous about making significant decisions regarding their homes. The goal is not to pressure anyone into buying but to provide them with a clear understanding of their options, enabling them to make the right choices for themselves and their families.

Buyers initially experienced shock with higher interest rates. However, over time, they have slowly adapted to this new normal of elevated rates.

Buyers often grapple with the weight of uncertainty, parsing through headlines riddled with conflict, economic instability, and global unrest. It's entirely natural to experience these emotions in such turbulent times. However, it's imperative to remember that buying a home should align with your circumstances and goals.

If you find yourself ready, willing, and financially capable of purchasing a home, it may be the opportune moment to do so. Even in the most challenging markets, there can be a silver lining waiting to be discovered.

When contemplating a home purchase, it's crucial to consider whether you want to move for lifestyle reasons. If the answer is "YES," then the primary factor holding you back may be the uncertainty and volatility in the current market.

Mortgage Rates: No one can predict where mortgage rates will be a year from now. However, consider the following scenarios:

-If you buy now, and rates remain relatively stable, there's no harm done.

-If you buy now and rates surge, you'll be grateful for your timely decision.

-If you buy now and rates drop significantly, you can always explore refinancing options.

Home Prices: Similarly, no one can predict future home prices accurately. Here are some considerations:

While some may foresee a housing market crash, there's a strong case for stability. The indication of a housing crash is not there; here is how National Association of Realtors chief economist Lawrence Yun explains:

"Housing inventory is about a quarter of what it was in 2008," Yun said. "Distressed property sales are almost non-existent, at just 2%, and nowhere near the 30% mark seen during the housing crash. Short sales are almost impossible because of the significant price appreciation of the last two years." He also projects a strong rebound for housing in 2024, with a 10% jump in home sales and a 5% increase in the national median home price.

Home Price Appreciation: Expect moderate appreciation, around 3-4% annually, in the coming years.

Over time, your home will likely appreciate at just under 5% annually, based on a 25-year average.

Ultimately, the decision to buy a home is a personal one, and it should reflect your unique circumstances and aspirations. Sometimes, it's the right time to buy based on your life, even if it may not seem like the ideal time based on market conditions. Making an informed decision that aligns with your goals is the key to finding the right path in today's housing market.

If you are looking to purchase an estate, a villa, a newly built residence, a condo, a home, or multi-units in Los Angeles and surrounding areas, we would be honored to serve you. You'll have an expert in your corner; ready to listen to your concerns, navigate intricate details, and provide end-to-end support for your dream of homeownership. With my market knowledge, personalized approach, and commitment to guiding you through every step, your journey to owning your ideal home becomes a seamless and successful adventure. When you're ready to embark on this exciting path, don't hesitate to reach out—I'm here to help you find your dream home.