February opens with Super Bowl pride & fever in Los Angeles as the Rams prepare for the game in their home city inside the impressive Sofi Stadium. America will be watching and LA will receive plenty of attention, which always helps fuel our real estate discussions. I have particular family interest as my cousin is married to Rams Special Teams Coach Joe DeCamillis. We are thrilled that during Joe’s 1st year with the Rams he joins them at this exciting Super Bowl.
Another scoreboard we are watching is the Real Estate market in Southern California. Statistics reveal there are the most homes under construction since before the Great Recession of 2008.
There is still a severe lack of inventory -- there were nearly 30% fewer homes for sale in Los Angeles and Orange counties in December than a year earlier! No wonder Buyers here are competing in multiple offers to acquire their home. Here’s proof --- 59.7% of Offers still had competing bids as 2022 opened. And there’s no quick end in sight.
In case you fear a “bubble market”, industry analysts tells us this is not nearly as likely as the conditions leading to 2008. Here’s why -- nearly 50% of all financed homes are now worth double their loan amount. That’s a record amount of home equity out there in the US. Even though mortgage interest rates are slowing rising (the Fed is trying to curtail inflation), Lenders are much more strict on qualifying Buyers now than they were in the boisterous 90’s and early 2000's. Values continue to rise in LA & Orange County, in and around 15%, but they are not expected to rise this year double digits. Sales volume numbers may drop, but that is more a reflection of little inventory than little interest in buying. This is still a very good time to be a Seller, and reasonably good for all Buyers.