Are you seeing a market shift?

Question

High priced areas shift first and some (not all) areas are seeing months of supply increase. Most lower priced areas are still red hot. What are you seeing?

Data: (Single Family Residential)

• Los Angeles County  Months of supply has increased to 5.1 months. The last time we had 5.1 months of inventory was in August 2012! Last year supply was around 3 months.Pending Sales have also dropped significantly (4087 vs. 7096 for August of last year)
• Months of supply has increased to 5.1 months. The last time we had 5.1 months of inventory was in August 2012! Last year supply was around 3 months.
• Pending Sales have also dropped significantly (4087 vs. 7096 for August of last year)
• Venice - 3.8 to 12.2 months of inventory
• West Hollywood - 7.8 to 29 months
• Inglewood - 3.2 months of inventory (Still hot)
• Compton - 3.4 months of inventory (Still hot)
• Culver City - 2.0 months of inventory (Still hot)
• Silver Lake - 1.7 months of inventory (Still hot)

• Months of supply has increased to 5.1 months. The last time we had 5.1 months of inventory was in August 2012! Last year supply was around 3 months.
• Pending Sales have also dropped significantly (4087 vs. 7096 for August of last year)

What have you noticed? How would a potential market shift change your strategy? These statistics fluctuate and data can be misleading. Please do your own due diligence.

Nick Hedberg · Answer

@Kevin Lefeuvre - Here is a graph for LA County showing we are starting to see a dip for $/SF.

http://themls.stats.10kresearch.com/infoserv/s-v1/...

More Info:

Inventory: The volatility from the last report has stabilized in many areas, but inventory is still increasing across the board, faster than typical for the Fall.

Days On Market: Some volatility and increases but relatively steady across the board.

LA County increased from 23 days to 26 days on market, homes are taking longer to sell.

Consumer Confidence: Edged up to a near 18 year high in the overall economy.

Interest Rates: Are continuing their upward trend, eroding buyer’s purchasing power. If you need a loan and you are thinking about buying. I recommend you purchase before the next hike in interest rates. Current average is 4.83% for a 30 year fixed rate.

Sources:

Inventory:

• LA County: http://themls.stats.10kresearch.com/infoserv/s-v1/PeE8-V3K
• Venice: http://themls.stats.10kresearch.com/infoserv/s-v1/PeRB-yYY
• West Hollywood: http://themls.stats.10kresearch.com/infoserv/s-v1/PeR7-koK
• Inglewood: http://themls.stats.10kresearch.com/infoserv/s-v1/PeRs-grx
• Silver Lake: http://themls.stats.10kresearch.com/infoserv/s-v1/Pe8F-8vk

DOM:

• LA County: http://themls.stats.10kresearch.com/infoserv/s-v1/...
• Venice: http://themls.stats.10kresearch.com/infoserv/s-v1/Pewd-NXt
• West Hollywood: http://themls.stats.10kresearch.com/infoserv/s-v1/PewY-2ED
• Inglewood: http://themls.stats.10kresearch.com/infoserv/s-v1/Peww-0B4
• Silver Lake: http://themls.stats.10kresearch.com/infoserv/s-v1/...

Consumer Confidence: https://www.conference-board.org/data/consumerconfidence.cfm

https://www.reuters.com/article/us-usa-economy-confidence/us-consumer-confidence-hits-18-year-high-house-prices-slowing-idUSKCN1M51YY

Chuy Gonzalez · Answer

I've been looking in Riverside...I see multi units sitting on the market a little longer, and then taking price cuts to finally sell. The properties still don't pencil out for the rents they bring in (unless you put 50% down)...but it does appear that things are starting to shift.

Kevin Lefeuvre · Answer

thanks @Nick Hedberg

Jay Hinrichs · Answer

and boy are there some ugly old houses in Vegas.. been driving around lately some of those you had to wonder were the heck they got the plans..

Robert Adams · Answer

August 2018 saw a 20% increase in inventory in Vegas in a single month (keep in mind in some price ranges we were under 1 month supply). Sept has continued to increase as well. We are still in a sellers market but definitely not as red hot as it was 6 months ago. Overpriced listings are doing more price reductions while the listings priced correctly are still selling and often times with multiple offers (just less offers, rather than 12 offers maybe they have 3).

I do agree that people are flocking to Vegas due to new taxes in other states like Bill mentioned. This trend will continue to increase through 2019 as people realize how the new tax changes in those states will directly affect their pockets come tax time. Welcome to Las Vegas land of lower property values, lower property taxes, no state income tax, no S.A.L.T. cap, etc.

With all that being said I do a see a softening here locally but nothing to be scared of. I think it is actually healthier to see some additional inventory hit the market so appreciation rates return to more sustainable numbers and financed buyers that were constantly getting outbid finally have the opportunity to lock up some deals.

Bill B. · Answer

Las Vegas prices continue to increase at nation’s highest rate after lagging behind Seattle for 10 months.

Las Vegas rents continue to increase at second highest rate in the country behind Orlando.

As long as California and New York/the east coast continue to increase taxes and regulations we should be good. Texas joins Florida as some of our biggest threats even if I can’t tolerate Florida’s humidity.

We are running out of land to build on, tear downs of older homes on a large scale will be a new experience for Las Vegas if it starts to happen. I don’t know if it will require a builder to change an entire neighborhood or if new homes will just eat at the edges of the older neighborhoods as most people building new homes wouldn’t want to live or build there.

Nick Hedberg · Answer

@Cornelius Charles - Good to know. Are you seeing anything else change?

@Chuy Gonzalez - Thanks for the info, I would have thought Riverside would have been a later place to shift but it appears buyer's are getting fatigued there as well.

Cornelius Charles · Answer

Hey Nick. Here in Ventura County, we are at 2.7 months of inventory.  inventory has slowly increased for the past 5 months.

Kevin Lefeuvre · Answer

Any update @Nick Hedberg @Chuy Gonzalez @Cornelius Charles  ?

So far in LA growth has clearly slowed down, but prices are still increasing, slowly but surely. Is anyone seeing this as a real trend leading to  price decrease in 2019 other than the usual winter seasonal slow down?

Bill B. · Answer

Looks like Las Vegas will finally follow Clark county and ban Airbnb. Only 161 legal air bnb locations in Las Vegas currently.

https://www.reviewjournal.com/news/politics-and-government/las-vegas/las-vegas-city-council-may-ban-all-future-short-term-rentals/?utm_source=listrak&utm_medium=morningheadlines&utm_term=Las%20Vegas%20City%20Council%20may%20ban%20all%20future%20short-term%20rentals%20-%20title&utm_campaign=Your%20Morning%20News

Are you seeing a market shift?

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