Downtown and National Real Estate Market Report
Probably the best news for real estate is the recent Foot Traffic Report, which shows that there’s been a real strong demand for housing nationwide all year long. It’s not been that up and down spike during the spring season. And probably even the better news, the October numbers; the last numbers reported, are even better than September numbers.
Normally by the end of the year, the demand for housing seasonally starts to fall off. That didn’t happen; not only is it remaining as strong as it was the month before, it’s actually increasing. That’s gigantic news; demands are strong, people are out there; they’re looking to buy. Most agree that interest rates are going to start going up, and they’re coming off the fence right now. But again, that’s the good news.
Let’s take a little look at the not such good #news for #realestate. When we go to the supply side of it, we can see that year over year, we’re way off the amount of inventory we had last year. So demand is way up; supply is down; that’s going to create a challenge. Now if we look at the month’s supply of homes for sale, we can see that what’s the number always hitting? We’re always aiming at? Six months; six months is a normal market.
Ladies and gentlemen, we haven’t had one month this year over 5.2 months. And the last two months, and three of the last four months, have been under five months inventory. That’s not good; it’s not enough. Now part of the challenge we had, and again this is a good news/bad news scenario, the good news is, the percentage of distressed properties nationwide has dropped dramatically since 2012. From 35 percent in 2012, to 9 percent this time last year, down to 6 percent.
So the number of distressed properties, foreclosures and short sales are dropping like a rock. And that’s good news. The bad news is we’re not replacing that inventory. Those are all houses for sale. We have to find other houses that are nondistressed properties to fill that void, because if we take a look at home prices and last look at the FHFA numbers by region.
We can see across the whole country; if normal appreciation is between three and three and a half percent; that’s a normal average annual appreciation, the vast majority of the country is way over those numbers. The only parts of the country that are not at at least normal appreciation are up in the Northeast; the Mid‐Atlantic and New England. Downtown Los Angeles is at 8% appreciation.
And if prices are going up, we should all feel good that, you know, the market’s getting better; the value of our home is increasing. But we have to realize if those increases happen too quickly, it will start to kill off some of the buyers. Downtown has gone up very quickly of the past few years. Many buyers now cannot qualify to buy in Downtown, or the buyers are finding that the prices per square feet are less competitive with some of the surrounding neighborhoods.
For serious Downtown buyers who are adamant about getting an urban loft or condo, the inventory is simply too low, and the number of buyers is still high as high income buyers and worldwide investors are competing to buy Downtown lofts and condos. The solution for this problem is for buyers to get access to pocket listings, off-market and unlisted properties for sale. Fill out the online form:
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Corey Chambers, Realty Source Inc BRE#01889449