We came into 2021 with all cylinders firing. We didn't have the typical slow down that we usually have in the winter. The market has been strong and continues to hold but we've finally seen a dip where the buyers aren't having to get as aggressive on offers in order to procure a property. I have to tell you it was quite exhausting for buyers and agents alike. When your buyer is writing around 50K over price, releasing all contingencies and still not getting the property it can be deflating. You have to consider the appraisal and who wants to buy a house and know you're underwater on day 1. We seemed to have peaked this summer in July with the aggressive over asking multiple offers. We still have a shortage of homes and inventory, the demand has cooled down a bit.
I have been getting a lot of calls from sellers lately and my first question now is if they're moving out of state. A lot of people are over California! It has to do with a multitude of things; such as, politics, fires and the ability to work from home now. People are looking to take their equity and move elsewhere and pay cash for their house. I can't say I blame them. That's easy living!
This winter will be a good time for those buyers that weren't able to get a house to get in. I think we're going to see a "normal" market next year. When I say normal I mean 2-4% appreciation and a more balanced supply/demand. New home construction is still going full speed ahead. Builders are still having supply issues and it's not just lumber.
The one wild card we are facing is inflation. This isn't just CA of course. It should be concerning to all on how much money the administration is looking to print. I don't want to get into politics but economically speaking we're writing checks we can't pay for. There will be fall out and repercussions for the trillions of dollars printed. I guess we'll just have to see how the cookie crumbles.
We do have a new curve ball that was added to the mix. A new bill was passes - SB-9. Here's a link if you would like to read more:
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB9
This bill was passed with the idea that the urban areas need more housing and this will allow certain owners to split their property where zoning wouldn't allow it before. There are plenty of conditions with this and it's so new that no one is exactly sure how it's going to play out.
Let me know if you have any real estate needs or questions. I'm happy to help!
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