Hot Property Q&A: Buying and Selling in Southern California
When discussing today’s real estate market, certain words and phrases invariably pop up in the conversation: lack of inventory, high interest rates, and uncertainty. All of those buzzwords are impacting buyer confidence, so we asked four real estate experts with extensive knowledge of the region to weigh in with reassuring insights and advice for anyone looking to make their move.
Q: WHAT IS THE SINGLE BIGGEST FACTOR AFFECTING THE SOUTHERN CALIFORNIA REAL ESTATE MARKET GOING INTO 2023?
A: Myra Nourmand
Principal Agent
Nourmand and Associates
Los Angeles’ newest and biggest factor right now is Measure ULA which is imposing a new and additional tax on sellers selling a home for a price of $5,000,000 or more. Sellers are being cautious because they have to absorb this new cost. The second biggest factor is the high interest rates and trust in banking institutions.
“Buyers should look at real estate as an asset class. Their home holds value and is less volatile than other investments.”
— Drew Fenton
A: Joyce Rey
Head of the Coldwell Banker Global
Luxury Division for Southern California
Coldwell Banker
Consumer confidence, which is influenced by the current inventory shortage, uncertain future interest rates, and current events.
A: Drew Fenton
CEO and Co-Founder
Carolwood Estates
Buyer sentiment. As we had many years of massive price increases, buyers are holding out longer and looking for value. Blue chip areas will always hold value and should be looked at on a long-term basis.
“You can always fix a house, but you can’t change a location or add more land.”
— Myra Nourmand
A: Keith Markovitz
Realtor
TTK-Compass
Uncertainty and confidence. People are continually evaluating what’s going on in the world and how those things impact their own financial situation. People seem to be adjusting their perception of what “normal” interest rates look like. The thing we keep seeing over and over again is people’s willingness to pay a premium for homes that don’t require any work. People are extremely cautious about doing any renovations as there is seemingly no idea how long it will take or how much it will cost. Adding to the general uncertainty of things, people want to know what their exposure will be, and buying a property that’s “done” eliminates the issue in their minds.
Q: HOW SHOULD POTENTIAL HOMEBUYERS APPROACH PURCHASING A HOME IN THE REGION’S HOTTEST AND MOST ACTIVE NEIGHBORHOODS?
A: MARKOVITZ
Have your financing clearly in order and be prepared. These are the areas where you could still be competing with other home buyers. Be sure you’re working with an agent or team that truly specializes in the types of homes you’re looking for. We often know about homes not being publicly offered to the market.
A: REY
They should hire an experienced, knowledgeable agent to guide them! Those hot neighborhoods are incredibly competitive, so advanced preparation is key to securing a property in a multiple-offer situation. A skilled agent will conduct extensive research in order to establish value and offering price, will likely have a relationship with fellow brokers, and guide you through the negotiation and entire sales process.
A: FENTON
Find the best location within their search criteria. The age-old adage applies: “Location, location, location.”
“Real estate is the best hedge against inflation as well as the best long-term investment choice.”
— Joyce Rey
A: NOURMAND
All buyers should have their finances in order before they start seriously looking for a new home, especially in the hottest neighborhoods. It’s very important that a buyer talks with their bank to find out how much they can afford. Knowing what they are capable of spending, as well as comfortably spending, will help structure a competitive offer quickly.
Q: WILL 2023 BE A GOOD TIME TO LOOK FOR A SECOND HOME, A VACATION HOME OR AN INVESTMENT PROPERTY?
A: REY
Absolutely! Real estate is the best hedge against inflation as well as the best long-term investment choice. Interest rates have started to tick downward and purchasing another home serves a dual purpose of lifestyle improvement and future financial prosperity.
A: MARKOVITZ
People have been very active in the desert so far in 2023. There is less competition than last year and some more properties to choose from, making many buyers feel it’s a great time to purchase.
A: NOURMAND
Absolutely, yes! I feel that the second home and/or investment market has softened considerably. It’s a luxury for people to have a second home and it’s a great time to buy.
A: FENTON
Yes, 2023 is an excellent buying opportunity for a second home/property. It has become a buyer’s market, but this may not last long.
Q: IN AN INFLATION-INFLUENCED ECONOMY, MANY HOMEBUYERS ARE LOOKING TO GET THE MOST OUT OF THEIR MONEY. WHAT ARE THE BEST METHODS TO ENSURE MAXIMUM RETURN ON INVESTMENT?
A: NOURMAND
It is important to focus on location! The size of the land matters, too. I say this all the time: You can always fix a house, but you can’t change a location or add more land.
A: MARKOVITZ
Always buy in the best location you can and find something special. It often makes sense to spend more to end up with something unique in the marketplace.
A: REY
Careful, knowledgeable remodeling will always enhance the value of your real estate holdings. Get to know your area of interest, determine your budget for home improvements, find reliable contractors and designers to assist you, and again seek out a real estate professional to advise on what home improvements perform well in your local market. A good real estate professional will locate the best values both on and off the market as your original purchase price is a key factor in maximizing profits.
“The thing we keep seeing over and over again is people’s willingness to pay a premium for homes that don’t require any work.”
— Keith Markovitz
A: FENTON
Buyers should look at real estate as an asset class. Their home holds value and is less volatile than other investments while providing excellent utility.
Contact us with comments or questions at hotproperty@latimes.com