It’s 2023 and I hope your new year is off to a good start. The real estate market has changed. Let’s first look at the numbers and then stick around until the end to find out how you can take advantage of the current market.
The median estimated home value here in Lomita is $830,000. That’s down 2.84% over the last month. It’s down 8.72% over the last quarter. It’s down 2.51% over the last 12 months, but it’s still up 14.68% over the last two years and up a substantial 19.3% over the last 36 months. Now, the short term peak of the market was somewhere in the middle of last year. And if you remember, last year was absolutely crazy with people paying well above asking price to purchase a home.
Prices have softened since then, but it’s nowhere near the 20 and 30% market crash that we see on all the little clickbait headlines. Now, we can also see that we’re still up the 14.68% over the last two years. Remember, historically, home appreciation is only about three and a half to 4% a year. So we’re still doing pretty good and well above average for home values.
In comparison, the median value in Los Angeles is $817,000. In California, it’s $745,000. And for the entire country, it’s only $345,000. If you want to find out what your home’s worth right now, go to HousesInSouthBay.com and get an accurate valuation or leave a comment below and I’ll send you a free report.
Hello, everyone. Steve Huhta here from Houses in South Bay dot com, bringing you the Lomita Real Estate Market Report for December 2022. Remember to like subscribe and especially share if you find this a value and please comment below about what you think’s going to happen in the market. It really helps me with research and answering your important questions.
Looking back in December, we had 15 homes for sale on the market. Out of those 15 active listings, only four sold and we had another three pending. Those four that sold ranged from this two bedroom, one bath, 896 square foot home on a 6933 square foot lot. Now, this home had some fire damage and it sold for only $537,500. Then it ranged to this 1410 square foot, four bedroom, one bath home on a huge 19,721 square foot lot that sold for $1,240,000. Of those four homes, it sold all four of them went for less than the asking price.
Now we know that prices going up and down are a factor of supply and demand. And if you’ve been following the news, we know that demand is way down because of uncertainty in the market, mainly due to rising interest rates and inflation. So we would think that shrinking demand would, of course, push prices lower. But let’s take a look at the supply side to see why we don’t think it’s going down very far or for very long. The supply side is a combination of new listings coming into the market and the existing inventory already sitting on the market. We can see that new listings are at the lowest level in the last five years and that existing homes on the market are also near the bottom, meaning that although we do have a dip in demand, we also have a dip in supply, keeping our current market fairly stable.
Talking about supply and demand, we can also look at how long homes sit on the market, which is averaging 63 days right now with the median days on market at about 31. Now, by itself, we would think that rising days on market would show a rise in inventory.
But if we look at the supply versus demand balance of inventory, we’re only at 1.8 months of supply right now, which as you can see is about in the middle of the inventory range for the last five years. This is why it’s important for you really to be on top of all these numbers. We need to know all of these numbers and how they interact to better advise our clients and how to price and position their homes when selling and how best to help our buyers take advantage of opportunities in the market. So even with a slowing market, a low supply should, for now keep prices rather steady.
At the beginning of the video I talked about taking advantage of the changing market. For sellers, demand is less so to maximize how much you make from your home. We can’t just put it up for sale like we did a few years ago. To maximize the value of your home, you’ll need to prepare your home a little bit. Now that can range from simple decluttering to doing some deferred maintenance or even some renovations. You also need an active and aggressive agent to market your property to the most potential buyers. If you’re looking to maximize the value of your home, reach out so we can put together a plan that’s right for you.
And for you buyers. This is actually a pretty good time for you to take advantage of the current market. If you’ve been trying to buy for the last few years, then you know how competitive it’s been to get an offer accepted. Now you have a lot more strength in negotiating an offer that is right for you. Sellers, who have been indifferent to your needs and wants because they had so many offers to choose from, now have to be a little more accommodating to get their home sold for the maximum price.
Yes, interest rates have gone up, making homes less affordable, but that’s an opportunity for many for one. Higher interest rates are softening prices and the demand giving you some opportunities you didn’t have a few years ago. This may also allow you to negotiate some assistance with the purchase, such as repairs, closing costs, or even having the seller help you buy down your interest rate.
And remember, you’re not buying an interest rate. You’re buying a home. If interest rates continue to climb, you will have saved money by acting. Now. And if interest rates fall, you can refinance to that lower rate. If your plans are to live in the home for a long time, you should not be caught up on current interest rates, but more so on what fits your family’s budget and needs.
And even more good news for buyers. Buying a home is a quality of life purchase benefiting you and your family in many ways, besides what it cost every month. Yes, it costs more for you to buy right now, but once that cost is locked in, it’ll stay the same forever. Unlike rent, which historically keeps going up here in Southern California.
Now, my final thoughts are, is that rising inflation is actually a reason to buy a home, purchase shields and stabilizes your largest monthly cost, your housing cost against inflation. Rents will continue to rise with inflation, whereas a home mortgage will remain the same and build equity over time. History also shows us that once inflation is under control, we’ll probably see lower interest rates giving you a chance to lower your payments in the future. But don’t wait until then to buy. When interest rates go back down, prices will go back up. Also, don’t be afraid of all the media hype, no matter what the state of the economy. You still need a place to live and build memories for your loved ones. Would you rather be doing that while paying off your own home or paying off your landlord’s home?
For questions on buying, selling or investing. Contact me. So I can help.
Bye for now.