Times of challenge and adversity provide clarity on what’s important. Many of us have felt a closer draw in the past weeks to friends and family, even if done so over the phone or via a virtual platform. This has also certainly held true for me regarding my clients. I have always had a very strong sense of appreciation for those whom I have had the opportunity to serve.
In light of the circumstances we are all facing, I wanted to provide some of my professional insight on what is happening and what I'm experiencing in the world of local real estate.
Due to the fluidity of the situation, it is hard to gauge what the exact overall impact will be on our local real estate market. The beginning of 2020 was one of the busiest quarters I have ever experienced. The market in Greater Los Angeles, as well as most of the country, started off with immense demand. The sales inventory had been receiving multiple offers and sale prices were surpassing list prices in the majority of the transactions in the South Bay. I had experienced this with almost every single one of my transactions thus far this year, both with my buyer and seller clients; many of those properties receiving double-digit offers. The past couple of weeks have shown an expected slowing of activity. Since 03/15/20, eighty-nine homes have gone into and remain in escrow within the South Bay region, per the MLS data; compared to one-hundred and seventy-five during the first two weeks of March. Nonetheless, it has still been a competitive environment, especially in the sub $1.5M price point. This week I had clients interested in writing an offer on a property in Torrance that had just hit the market days before; it received several offers and was put into contract over the list price. The current circumstances will of course force pause on those buyers that have to assess job security, reduction of assets connected to the stock market and the general rearranging of day to day life. This has led to a reduction in the overall competition, but with the housing shortage combined with extremely low-interest rates, properties are still being pursued strongly by ready and willing buyers. In times like these, there are always undoubtedly comparisons made to previous times of financial crisis, namely the recession beginning in 2009. I feel there are important considerations to be made in how they compare. The real estate industry, with the loose lending parameters and sub-prime loans issued, was one of the main culprits of that financial crisis. We also had the issue of over-building during that time period, with a much higher volume of new construction built than compared to today. In 2009, many of our issues were self-inflicted. Although the duration of the current economic shut-down is still unknown, it is encouraging to see that there is a sense of normalcy regaining in the eastern countries that were initially impacted. If that is any indication of timelines, I foresee a regaining in momentum within our local real estate market. One of my favorite quotes is: “It's not what happens to you, but how you react to it that matters.” I see an opportunity within these challenges that we face and want to use this as an opportunity to be of service to you however I can.