Patience Is the Key to Buying a Home This Year
Dan may • April 28, 2021
Patience Is the Key to Buying a Home This Year
The question many homebuyers are facing this year is, “Why is it so hard to find a house?” We’re in the ultimate sellers’ market, which means real estate is ultra-competitive for buyers right now. The National Association of Realtors (NAR) notes homes are getting an average of 4.8 offers per sale, and that number keeps rising. Why? It’s because there are so few houses for sale.
Low inventory in the housing market isn’t new, but it’s becoming more challenging to navigate. Danielle Hale, Chief Economist at realtor.com, explains:
“The housing market is still relatively under supplied, and buyers can’t buy what’s not for sale. Relative to what we saw in 2017 to 2019, March 2021 was still roughly 117,000 new listings lower, adding to the pre-existing early-year gap of more than 200,000 fresh listings that would typically have come to market in January or February. Despite this week’s gain from a year ago, we’re 19 percent below the new seller activity that we saw in the same week in 2019.”
While many homeowners paused their plans to sell during the height of the pandemic, this isn’t the main cause of today’s huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division, shares:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or, ’starter homes.’”
When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear (See graph below):
The number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase. Khater also explains:
“Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage and that deficit has grown. In 2018, we estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, we estimate that the housing shortage increased to 3.8 million units by the end of 2020. A continued increase in a housing shortage is extremely unusual; typically in a recession, housing demand declines and supply rises, causing inventory to rise above the long-term trend.”
To catch up to current demand, Freddie Mac estimates we need to build almost four million homes. The good news is builders are working hard to get us there. The U.S. Census Bureau also states:
“Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,766,000. This is 2.7 percent (±1.7 percent) above the revised February rate of 1,720,000 . . . Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,739,000. This is 19.4 percent (±13.7 percent) above the revised February estimate of 1,457,000. . . .”
What does this mean? Lawrence Yun, Chief Economist at NAR, clarifies:
“The March figure of 1.74 million housing starts is the highest in 14 years. Both single-family units and multifamily units ramped up. After 13 straight years of underproduction – the chief cause for today’s inventory shortage – this construction boom needs to last for at least three years to make up for the part shortfall. As trade-up buyers purchase newly constructed homes, their prior homes will show up in MLSs, and hence, more choices for consumers. Housing starts to housing completion could be 4 to 8 months, so be patient with the improvement to inventory. In the meantime, construction workers deserve cheers.”
Bottom Line
If you’re planning to buy this year, the key to success will be patience, given today’s low inventory environment. Let’s connect today to talk more about what’s happening in our area.
Here are the latest housing market statistics for 90034! If you'd like more detail on the market, what's available or how much your home might be worth, let's set up a meeting to discuss! #houseexpert #housingmarketexpert #house #home #listreports #localhousingdata #areaexpert #realestate #realestateagent #househunting #homeowner #hometrends #housingtrends
Text: After a 2nd Year of stubbornly high mortgage rates and weak transcaction volumes, it's hard to see the positives. Here's why you should stay hopeful. Read More
Happy 2025! Wishing everyone new year filled with joy and healthiness! It’s time for my annual Market Roundup which analyzes the sales activity for the entire Beverlywood area then drills down on Beverlywood Homeowners, Castle Heights (west of Robertson Bl. south of the HOA) and Reynier Village (east of Robertson west of La Cienega from Cadillac to Kramerwood Pl) using the boundaries outlined on the SORO website. Note : All data used for this analysis is supplied by Combined L.A./Westside MLS and is deemed accurate and reliable. It has not been independently verified and may not constitute all sales, just those reported in the MLS. Single family homes sales only.
This Red Day, KW will be honoring our Veterans. Your generous donation will help us provide a nutritious meal to 500 deserving men and women. These brave vets have served our country, and now it's our turn to serve them. Any amount of donation can make a big difference. Please use QR code to donate here . Thursday May 9th 11am-1pm Main parking lot at The VA Wilshire Federal Building 11000 Wilshire Blvd, Los Angeles, CA 90024
An area homeowner contacted me recently requesting advice on which paid service I recommend for identifying potential real estate fraud activity on their Beverlywood area single family residence.. My response was, “NONE! IT’S A SCAM. Your tax dollars enable you receive this important information for FREE.” Here is an explanation of how the service works. Below you will find a link to the website to register. The Los Angeles County Assessor’s e-Notification service gives homeowners the opportunity to register their e-mail to be alerted whenever a foreclosure, transfer of title, or mortgage is recorded on their property with the Los Angeles County Registrar-Recorder/County Clerk. This notification allows property owners a means to identify potential real estate fraud activity, such as a fraudulently recorded lien or deed. What is the Property Owner e-Notification Alert? Currently, the Registrar-Recorder will, within 30-days, mail a copy of a Grant Deed, Quit Claim Deed, Deed of Trust, or, within 5-days, mail a copy of a Notice of Default, or Notice of Sale to the property owner upon its recording. Now, homeowners can also opt-in for e-mail notifications. Once a homeowner registers, they will be sent an e-mail of any activity on their property within 48-hours. How does a homeowner enroll in the Property Owner e-Notification? To enroll in Property Owner e-Notification Alert, the homeowner simply creates a profile on the Los Angeles County Assessor’s portal website at https://assessor.lacounty.gov/news-information/enotification , click on Register Today, fill in the information, check the box for Opt-In for AIN/Recorded Document e-mail notification and click submit. Once they have created an account, log in to the portal and select “Property Owner e-Notification Alerts” on the landing page. Enter the AIN (Assessor Identification Number) on the “Property Owner e-Notification Registration” page and select “Add.” Once added, they will begin to receive electronic notifications when a document is recorded with their linked AIN. A homeowner may repeat this step to register any other LA County properties on their account. There is no limit and there are no fees. Why does the LA County Assessor offer E-Notification? The service allows property owners the opportunity to seek free, legitimate assistance and helps them avoid falling victim to real estate scams. Also, if a property owner suspects erroneous or fraudulent activity, they can report it to the Department of Consumer and Business Affairs at (800) 593-8222 , online at dcba.lacounty.gov , or by e-mail at homehelp@dcba.lacounty.gov . Dan May is among the leading real estate professionals in Los Angeles County. He can be reached at (310)739-8647 and dan@danmayrealestateteam.com Give Dan a call to confidentially discuss your options, your home’s value and/or for a list of local vendors.
Market Snapshot: 16 Single Family homes sold within the Beverlywood HOA and Adjacent boundaries (area 9 in the MLS) during the entire month of April 2024 compared to 15 in March and 9 in February. The 16 single family homes that sold in April were on the market for an average of 23 days and sold for an average of $1026.61 per sq. ft. of living space and 97.45% of the OLP (Original List Price). As of May 1st there are currently 22 Single Family homes for sale within the entire Beverlywood HOA and adjacent boundaries, down from 23 the prior month and 27 in February. The 22 single family homes currently For Sale have been on the market for an average of 59 days at a average price of $2,310,272 and $1122.87 per sq. ft. There are currently 15 Single Family homes “under contract” which means in escrow, likely closing soon. I study the market every day. Call Dan May today for local knowledge, flexible commission and proven results at (310)739-8647 .
Market Snapshot: 15 Single Family homes sold within the Beverlywood HOA and Adjacent boundaries (area 9 in the MLS) during the entire month of March 2024 compared to 9 in February, a 67% increase. The 15 single family homes that sold in March were on the market for an average of 36 days and sold for an average of $950.34 per sq. ft. of living space and 98.81% of the OLP (Original List Price). As of April 1st there are currently 23 Single Family homes for sale within the entire Beverlywood HOA and adjacent boundaries, down from 27 the prior month. The 23 single family homes currently For Sale have been on the market for a median of 39 days at a median price of $1,995,000 and $1024 per sq. ft. There are currently 21 Single Family homes “under contract” which means in escrow, likely closing soon. Analysis: With just 23 homes for sale and 15 sold last month alone, that calculates to less than 2 months supply of homes. Fewer than 6 months supply is considered a SELLER’s market. The unofficial start of the Residential Selling Season is the day after the April 15th Income Tax Deadline, April 16th. Contact area specialist Dan May today for a confidential, no obligation consultation at (310)739-8647 , you will be glad you did!
