A Real Estate Recession For Sales But Not Equity

By GABRIELLE SHUTTER | Special to the Palisadian-Post

As the cooler weather starts bringing us into fall, a cooled down market seems to be among us.

With school in session and seasons changing, the high demand for real estate has seemingly slowed. Los Angeles home sales have decelerated considerably (up to 50% in some Westside neighborhoods), however, home values continue to appreciate. It is all about supply and demand.

With inventory levels at all-time lows, the trend continues … more buyers than sellers. So while the rate of appreciation is about half of last year at 10%—compared to the pandemic years’ stratospheric 22%—homeowners are continuing to build equity.

What does this mean for a buyer? Ultimately you have more time to find your dream house without worrying about getting swooped up amid the chaos of wild bidding wars and multiple offers.

Some buyers are more reluctant, and homes are staying on the market longer. This means those that are ready to make the purchase have more time to plan, prepare and put in the best offer.

The Federal Reserve has been moving aggressively to control inflation, and though mortgage rates have increased quite a bit, there is still a great opportunity to buy. Without the craze of 30 to 50 offers on a property, and the high demand we saw a few months ago, buyers have many options when it comes to saving on cost and the ability to get across the finish line.

Finding the best home for your value is here; buyers now have the luxury of time to review their options and negotiate their needs. Though not entirely necessary, some sellers are taking price cuts after a few weeks on the market, which can create the ideal situation for buyers to come in and make an offer that’s more likely to get accepted.

As always, all-cash offers are still getting accepted at a higher pace, and are ultimately the most beneficial for both buyers and sellers. Buyers offering all cash are at a significant advantage, given the current pricing cuts. The added benefit is that those going the all-cash route don’t need to worry about an appraisal coming in low, and challenging the loan and escrow process.

The bottom line is that buyers will be able to hone in on their needs, and sellers will continue to negotiate theirs. Meanwhile, housing values are not expected to drop, however, buyers will be given the advantage. Interest rates have gone up, demand has slowed, and those still in the game will see opportunity and flexibility.

Overall, the real estate market continues to hold strong through inflation and talk of a recession; and buying a home now may be better than it has been the past couple of years. Just as novelist Morris West would say: “If you spend your whole life waiting for the storm, you’ll never enjoy the sunshine.”

Amalfi Estates has sold close to $2 billion in properties and has been a leader in the community through philanthropic work. If you are thinking of buying a home or selling your own, contact Gabrielle Shutter at 323-283-9535 or gabby@amalfiestates.com.