What a wild ride it has been.
The real estate market doesn’t seem to know there is a global pandemic. Sure showing’s now require masks, and some buyers are required to sign a letter of indemnity, but sale prices are as healthy as we have ever seen. Homes that went unsold for close to a year in 2018 are now being sold in less than a week for almost double their 2018 price in some areas. Sadly I have first hand knowledge. For those who bought in 2015-2018 bravo!
Think you missed the boat? Well, we will see. The lack of inventory is keeping prices high and low interest rates make it frustrating for those who want to buy, but how is this going to end? That is the question on everyone’s mind.
Just as an example, because the “Golden State” is so often in the news, if you want to live in California, high prices and low inventory levels make it almost impossible for first time buyers to enter the market. The average home price in Orange County is now $873,000, in LA it is $750,000, and in Riverside the median home price is $490,000. It is said that 77% of residents in California cannot afford to buy now. You’d think that buyers would be getting bargains due to fears of Covid but that certainly did not materialize. Some sellers held off on selling for fear of Covid entering their home but that was short lived. The pandemic has not affected the real estate market in a negative way, in fact it is quite the contrary.
But where will 2022 take us? Well, it depends who you ask. The Fed has already announced that they will likely be raising rates three times in 2022 in an attempt to keep inflation in check, and the rumor in California that Prop 13 will someday be repealed is always looming in the back of everyone’s mind. If the proposition were to be repealed, be ready for a massive amount of homes added to the MLS, which in turn will bring prices down. The fears of California going bankrupt back when Arnold Schwarzenegger was Governor isn’t on anyone’s radar anymore, and additionally, California received a massive infusion of funds into the state courtesy of the Federal government, akin to a big B-12 shot, making California politicians giddy.
And then there’s gold. The price of gold is currently at a whopping $1808.79 as I type. Everyone of course wishes they had bought years ago and those who did have a big fat smile on their face and have earned their bragging rights. My ‘pool guy’ has been telling me to buy gold for years and he was right. It’s hard to bite the bullet and buy anything over $1000.00 for such a small unit of measure, much less $1500.00 a unit, but that is why the market is not for the weak. Now is an excellent time to sell scrap gold that we all have. Your high school ring, chain necklaces and bracelets from the 70’s that you know you will never wear, or the rings that are no longer in style. A recent cleaning out of my jewelry box netted me $700. Not bad for items I will never miss.
While interest rates are still historically low, some people can swallow the high asking prices of real estate, because their loan payments will be small, that is if their job was not affected due to Covid. The good news is that people who may have lost their job, can now pick and choose where they want to work as the job market has never been better from the employee’s standpoint. Lenders may want to see a minimum of 6 months in your current job but that will go quickly. Lenders are moving at a snails pace so plan accordingly.
We all miss the “open house” signs about town, and there is no indication when that practice will return but in the meantime virtual tours are the best you can do without being there in person.
If you or a loved one must sell due to probate or another matter that cannot wait, an estate sale is a way to quickly move your process along. Estate sales continue despite Covid with the addition of social distancing and other safety protocols in place. If your HOA doesn’t allow estate sales in your complex, many estate sale firms can still sell your items ‘off site’, at auction, or private sale.
Buying or selling real estate has always been a wild ride and with Covid it has tested it further. If nothing, 2022 will surely be interesting.