Top 3 Things That Concern Us About the Southern California Real Estate Market
As long time, Southern California Real Estate agents, we get asked questions about the Real Estate market all the time including:
- Is the market going to crash?
- Is it a bubble?
- Are prices going to drop?
We don’t have the answers to these questions but as agents who own homes and invest in Real Estate we have 3 things on our minds that do concern us about the Southern California Real Estate market.
#1 - Affordability
There’s no doubt that home prices in SoCal have continued to increase over the last 5 years but as those prices have increased we’ve not seen wages continue to increase to keep up with rising home prices.
#2 - Rising Interest Rates
The second thing that we’ve been concerned about in the Southern California real estate market is rising mortgage interest rates.
As the Federal Government feels that the economy is getting better and better they are going to naturally increase interest rates.
One side effect of rising interest rates though is that when they have risen in the past this generally means that markets and prices usually soften especially in Real Estate if you track it back over a number of years.
#3 - Lack of Inventory
Last of all, but most important is lack of inventory.
Right now, we have a lack of home inventory in Southern California for a variety of reasons including the fact that fewer new homes are being built than in years past and more homeowners are choosing to stay in their homes rather than move.
The reality is that even though we have some concerns about the Southern California Real Estate market no Real Estate agent can really tell you how these factors will ultimately affect Real Estate.
All an agent or analyst can do is give you their opinion and make projections but at the end of the day, nobody can tell you about what’s going to happen in the Real Estate market six months or 1 year from now.
Contact the Fred Sed Group
Are you concerned about the Southern California Real Estate market and want to know if it’s the right time for you to buy or sell a home? Contact the Fred Sed Group by calling us at (800) 921-9231 or connect with us online.
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