And so we have the first month of the new decade already behind us…. and a very interesting real estate market both locally and across the U.S and Canada… a totally different market than we were in this time one year ago.
One year ago, in January 2019, we had interest rates a full point higher than we experienced in January 2020. At the same time, last year, there was growing inventory on the market with inventory sitting longer on the market, whereas the start of this year found us with lower levels of inventory than normal. While initially I thought this was a Southern California phenomenon, it was in fact, not, but actually across the country, the same thing. Low levels of inventory, more buyers looking due to lower interest rates, and not much inventory coming on the market.
Let’s look at the numbers in the city of Long Beach from the last 31 days, in January 2020:
Number of residential properties on the market (active listings): 368 (normal levels between 500 and 600)
Number of residential properties that went under contract in January: 219
Number of residential properties that closed in January: 221
Average price of property sold in Long Beach in January 2020: $658,967 (compared to $568,544 in January 2019)
The numbers above suggest we have approximately a 1.7 month supply of homes for sale in our area, and prices are 16% higher than they were last January on average.
In some zip codes, for some home classifications, such as entry level single family houses or condos, the supply is actually under 1 month.
I’m no economist, but my observation is that this combination of lower interest rates (causing increased demand) and lower inventory (lower supply) is causing prices to be higher this year vs last.
A quick scan of the news headlines tells us the future is uncertain…. but the present is clear, and that is we have these factors in the market as we head into the spring real estate buying season:
- low interest rates (1 point lower than this time last year)
- low inventory (30% fewer homes for sale than this time last year)
- buyers looking to enter the market
- sellers looking to exit the market but also holding off
If you have been sitting on the fence, looking to somehow take advantage of an interesting market, and searching for an agent who has an understanding of the market conditions, give me a call or an email. Whether you are buying or selling or both, I can position you in the best possible way to achieve your goal.