As the dawn of a new year unfolds, I wanted to take this opportunity to wish you a fantastic start to 2024! I hope this year brings you renewed energy, priceless memories, and maybe even a new home?

In the ever-evolving realm of real estate, understanding market trends and forecasts is crucial for making informed decisions; and that is what I am here for. To keep you updated and well-informed so I'm excited to share valuable insights and predictions that could significantly impact your real estate ventures this 2024.

First, let us look back at what happened in 2023 in terms of inventory, demand, and the Expected Market Time. Last year the Los Angeles inventory started with 7,664 active listings, the second lowest level to start a year since tracking began in 2012, only behind 2022’s 4,432 anemic start. Prior to the pandemic the average start was 10,079 listings. Inventory only dropped the first two quarters reaching 6,778 listings! That's extremely low, especially as we cruised throughout the summer season. With rates stubbornly remaining above 7% since July and even reaching 8% in October, the peak was not reached until the start of November where inventory reached 9,053 homes, growing by 34% since April. Then rates declined, and so did inventory and we finish up the year with just under 7,000 active listings, lower in count from when we started the year in January 2023.

Although the interest spike highly impacted affordability, if a property was priced correctly, the results of the low inventory still caused the housing market to be more of a sellers' market. It was not as crazy as the past few years where we saw 10-20 offers on the table but buyers were still competing against a handful of other buyers. We didn't see much of the crazy seller's request on counter offers but we did see majority of counter offers with request of shorter contingencies and “sold as is” terms. Typically, buyers who were looking at homes under $1.4mil had to still process a few offers before getting an offer accepted.

So we ask ourselves what has caused the low inventory? Well homeowners opted to stay put and “hunker down,” enjoying their fixed, low monthly mortgage payments that they locked in during the record low interest rates during the covid season. A remarkable 85% of California homeowners with a loan enjoy a fixed rate at or below 5%, 68% of those homeowners are at or below 4%, and 30% locked in a rate at or below 3%! With property values increasing and interest rates doing the same, homeowners who considered selling would start running numbers with their loan consultant and things just didn't make sense! Most likely that seller would pay twice to three times more than their current mortgage payment for a smaller home! I am speaking from firsthand experience as well!

So, what can we expect for this New Year? Well, if only we could have a crystal ball, right? But looking at data and eating, breathing, and living real estate every day I feel pretty confident that if property values didn't crash in 2023, they for sure won't be crashing this new year. From the experts we are forecasted to see an increase in values at around 4-5%. We forecast to see interest rates floating throughout the year from mid 5% to the high 6%, low 7’s. Inventory may possibly continue to stay tight until we consistently see rates sticking in the low 6% and more movement when rates reach the 5’s.

We also hear rumors of the California Dream for All Shared appreciation program granting 20% down of your down payment coming back in a couple months, so if this was something of interest, I advise that you start your required online class. Additionally, the housing market will follow a typical housing cycle. Spring is the strongest in terms of demand, followed by the Summer Market, then the Autumn Market, and finally the Holiday Market. Luxury housing will be sluggish and will continue to transition to normal, longer market times, often taking months to procure a sale while properties under $1mil will have competition if priced accordingly to the current fair market value.

The bottom line is that this is an election year, and the economy will cool down sometime in 2024. When that occurs, rates will drop, and the housing market will heat up. No matter what, there will be more homeowners opting to sell their homes, pending sales will increase and surpass 2023 levels, and there will be more closed sales. Ultimately, how hot the housing market will get depends upon when the overall economy downshifts but know I will be here to share all those market updates with you. I am only a phone call away for you your friends and your family so if you are thinking of buying, selling or investing just let me know. My cell phone number is 510-927-6588 and you can call or text me anytime. With lots of love and good vibes, I wish you a prosperous New Years! Cheers to the good things that are yet to come~!

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I would also like to share today’s rates shared by one of my trusted loan consultants:

• Government Loans (FHA / VA) are in the high 5's and low 6's
  
• Conventional Loans up to $765,550.00 are in the low to mid 6's
  
• High Balance Loans $765,550.00-$ 1,148,325.00 are in the mid to high 6's
  
• Jumbo loans above $1,148,325 are in 6's  
  
• Bank statement loans – They are available with 10% down again! 8's and 9's depending on down and credit score. 
  
• No income qualifier - 40% down with reserves! In the 8's!  
  
• 0 down loans are in the high 7's - 660 credit score min right now, up to $740,000.00. 
  
• Private Money lenders – hard Money Loans - 35% down!
  

Lastly, some food for thought and after looking at today’s rates, if your estimated preapproval interest rate is let's say 5.75%, we can always try to negotiate to buy down a point by the seller, bringing that rate down to 4.75%! Now that’s HOT!

With Care, 

Your Realtor

Linda Mendoza 

CalDre#02014425