Are Rising Interest Rates Softening Neighborhood Property Markets? – Larchmont Buzz

Are rising interest rates slowing down the local property market? We asked local experts for their opinions.

The Los Angeles Times recently reported that “rising mortgage rates are putting the brakes on the once-hot housing market in Southern California and across the country.”

But what does that mean for the larger markets of Hancock Park, Windsor Square and Larchmont Village? I requested that

“From July 21st to July 22nd, Hancock Park, Los Feliz, Silver Lake, Hollywood Hills East and Studio City listings were down 6% year-over-year,” said Raised in Windsor Square, St. Andrews Square.

“While the market is down 10% year-over-year in accepted offers, the most notable statistic is a 48% year-over-year decline in homes sold (87 sales down from 166 sales. ), but listing stock hasn’t changed so dramatically. % increase) and the price per square foot is [a less important stat, in Jack’s opinion] is up 15%. “

So it all comes down to inventory. Hancock Homes’ John Duerler explained that the fewer homes, the higher the price.

Comparing July 2021 with July now, Duerler found 16 properties sold in 2021 with an average of 48 days on the market and a median value of $2.5 million. By contrast, only seven of his homes sold in July this year, with an average of 26 days on the market and a median price of $3.2 million.

Part of that is also pricing, explains Andrew Woodward of Keller Williams’ Woodward team. Woodward grew up in Fremont Place and lives in Windsor Square.

“If the price is right, it sells quickly,” Woodward told Buzz. “If sellers are prepared and realistic about pricing, this is difficult because pricing is an art, not a science. There are several properties that have had offers.”

“Hancock Park is very fashionable,” said Anne Loveland, a Loveland car who grew up in the neighborhood. “Overall demand growth is outstripping supply.”

“There’s demand, but sellers don’t want to be dumb, so when listing a property today, it’s important not to just look at a neighbor’s sale a few months ago,” says Loveland. “Pricing is very nuanced and artistic…always and even more so in a changing market.”

Current market conditions have also made selling less attractive to some homeowners, further reducing supply.

“Some people don’t sell because their mortgage is less than 3-4%,” says Loveland. “If they sell, their next mortgage will be over 5% for him. Plus, they have fees to pay. If they’re older, they’re[also] There are capital gains to pay. “

These historically low interest rates also mean that current owners can keep and rent out those homes, further reducing the supply of small starter homes.

“I think it will be interesting to see how the historically low interest rates of the past few years affect the market. I think some smaller homes will also be harder to come by because lower priced products are easier to keep and rent out because you can use them while maintaining a larger portfolio of assets than you sell to the next You can get extra income to offset housing taxes,” Jack said.

For others, selling doesn’t make sense because they have nowhere to go.Duerler also said: People are asking where I’m going. Some people aren’t ready to move.”

But Jack and Loveland say there is a strong market for refurbished homes given the complexities of supply chain issues and city permitting difficulties.

“We are seeing a flight to renovated inventory, with buyers becoming more cautious and particular,” Jack said.

“Because our home is 100 years old, we can sell it faster and for more money, let alone a repaired home,” says Loveland. “Unlike in the past, today’s buyers who can afford our homes are busy helping co-workers, making repairs, dealing with supply chain issues, and going through the city’s burdensome procedures in the building and safety departments.” , post-lockdown.

But if you’re already in the market, fear not. Properties are still rising, but not as fast as they used to. And for those in our neighborhood who’ve had homes for 25+ years, the valuation is probably 6x what they paid for, so if you think you’ll be moving in the next few years, it’s wise to sell. Loveland suggested.

“The price frenzy is slowing,” Loveland said. “This is why economists still think house prices will continue to rise. “

And we all agree that slowing down is probably a good thing.

“Buyers are really kicking the tires,” said Woodward. “I don’t see a lot of enthusiastic multiple offers.

Jack said he’s waiting to see results from the end of September compared to last year.

“I think after the coronavirus lockdown, people went back to summer vacations in July and August, and the seasonal nature of the market, like buying a home rather than traveling,” Jack said.

Jack tells Buzz that her lenders are seeing more buyers pre-approved, indicating that sales may increase before the holidays, and the last numbers in August He said he is seeing several buyers returning to the market during the day.

Yes, the market is slowing for now…but stay tuned!

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