Things are crazy. Civil unrest, global pandemic, and murder hornets are creating quite a stir and for good reason. But does all this equate to a declining real estate market? Here are four things you need to know:
- Los Angeles price points create a different buyer pool: Although the unemployment numbers are declining, over 50% of those unemployed are those in the restaurant business and hospitality. A bellhop making $15/hour is not able to afford a $500,000 home without a significant down payment. Obviously, we are talking about the general rule, not the exceptions. Because of this, the buyer pool only shrank slightly because of fear of the unknown, not necessarily because most of the buyers lost their jobs.
- Sellers have no intention of just giving homes away. According to a survey by the National Association of Realtors, Sellers don’t intend to give away price reductions just because unless they must. With that said, there are some Sellers who might need to get their home sold quickly, such as some investors, who have already lost money when they couldn’t do showings during part of March and April.
- Los Angeles isn’t reliant on just one industry, therefore remains strong. There are predictions of a declining market in areas like Houston. Why? Cannot say for sure, but I bet the oil industry has something to do it with now that there are less cars on the road. Los Angeles has many different industries to rely on: technology, entertainment, finance and more. With a diverse portfolio of industries, it keeps values more stable than in other markets.
- Your home matters now more than ever. As more people work from home, having an office might be more important. Or perhaps a yard since the kids can’t go to the park. People are starting to set new properties which might motivate them to move.
Of course, time will tell, but based on what experts are saying, the market isn’t going anywhere.
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