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Do you think prices in Southern California (Southwest Ventura County, San Fernando Valley areas) have topped out for a bit? Now that summer is over, do you think the prices will stabilize? Its been crazy - my son and his girlfriend/fiance have been trying to buy a condo and have been outbid on every single one. Prices are nuts if you ask me. Over $300k for a 1 bedroom basic condo is too much! Some are going for $20k over asking, which is insane! They are holding off until things cool down a bit, which I think is a smart move. They cant qualify for these higher prices, so they plan to sit back and save some more money for a down payment, and jump back in once things become more realistic.
So use your crystal ball .. what do you predict? Huge bonus points for whoever is right! LOL
You think $20K over asking is insane in CA? With CA prices? Try some of the markets here in Michigan- houses are going for $20K or more over APPRAISED value. And we are talking homes appraised $120-150K (selling for $140-180K). In some areas you cannot buy unless you have significant cash.
Anyway, I cannot answer for your market, but most of the country is in a seller's market at the moment. I would be surprised if that ended anytime soon.
No, they will not top out anytime soon. We have relatives in LA and SD who are looking in the same market-- first time buyers, one bedroom condos. There are a lot of young singles and just marrieds in these markets and competition is fierce.
Tell your kids to save more money and make better offers. Or get to know someone who is about to put their house up for sale and gives them first crack at it.
It's a trade off. Historically, as rates increase, sales slow down. The unique dynamic at play, currently, is the Fed really, really wants rates higher. So much so, they will hold their breath until it happens. But, the data in market reports fail to support the Fed's desires. Previously, if anyone on the Fed whispered higher rates, that would spur a run up on rates. Now, such comments may raise an eyebrow, but the market keeps its (figurative) chin down, and marches on with continued lower rates.
Meanwhile, during the struggle to control rates, values continue to climb. The hotter the market, the higher they go. Your kids can wait it out, but that could take years and be considerably higher than where prices are right now. A fall market means even fewer homes for sale, more competition for fewer homes.
There's a couple strategies they could employ, but finding an experienced agent is the best place to start. Maybe they should expand the market they are shopping (go out one more county). Or, seek out builders in newer communities. If nothing is being built, perhaps get on a standby list for any contract fallouts - usually there's at least one unit a month in the larger subdivisions finds its way back on the market, usually due to financing falling thru. They won't get to pick their options, but the sales price will be discounted. But when something comes up, they need to jump and jump fast. And bid on it like they are serious. I am willing to bet there's already been one they really wanted, but because it was early in the hunt, they thought they had to bargain. It happens to almost everyone in this kind of market.
This is where a good Realtor is worth their weight in gold. They will be on a constant hunt and be in tune with upcoming listings. Time to forget about the friend that just got their license or the rebate king - one were the buyers do all the hunting and bring in the rebate Realtor to just write up the offer. But if your young adults are like many, they think they know more than their parents. If that's the case, step aside, they need to get there on their own.
Interest rates are super low, so there is only one direction to go...... up.
When interest rates are super low, house prices are super high.
When interest rates go up, house prices fall.
This cycle repeats itself over and over.
So lets say you buy now at $300k, things happen and interest rates go up and the condo is now worth $250k. Now they cant afford to sell it. They are stuck.
My opinion? Rent till the market crashes. It will. It always does. If you forget history, you will repeat it.
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