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The State of Real Estate
Some of what to expect in 2023
Let it be inscribed in the Book of Real Estate that mid 2022 marked the end of the 2-point-something interest rates. It's widely agreed that such insanely low rates were the result of a confluence of an unprecedented set of circumstances, the likes of which we’ll never see again. Such a golden opportunity for buyers to purchase with such cheap money was an opportunity that no one could resist. Keeping in mind that such an extraordinary opportunity created such a huge demand for homes to purchase that it exploded into a Seller's market the likes of which we've never seen either. Prices shot up uncontrollably in part because buyers financing their purchase were willing to write a blank check for their dream home because, well, "the money was so dang cheap!"
Sadly, by mid-2022 the golden age of puny interest had drawn to a close. With the first 1/2-point rate hike by the Fed, based on my observations at the time, it appeared as if the entire country had collectively come to the realization that it was time to pick up the “empties”, wash out the ash trays and clean the carpet because the party was over. Frankly, I was caught off guard by how quickly consumer confidence evaporated into thin air. Even though interest rates were still very attractive (apx. 3.5-4%) and inventory was still very low (still only 1-2 months of supply in most neighborhoods), suddenly, buyers were seeing things very differently. They were walking into open houses with a confidence that I hadn't seen in years. As far as they were concerned, the tide has turned and they were going to take full advantage of the opportunity. And buyer confidence has only continued to grow with each rate hike over the course of the 3rd and 4th quarters of 2022.
But keep in mind that this real estate market has very little in common with the loan debacle of 2008 that led to a credit crisis, a flood of foreclosures and short-sales and massive devaluing of home housing prices throughout most of the country. This market is unlikely to produce a rash of foreclosures, in large part because most homeowners have plenty of equity in their properties and have refinanced at those insanely affordable interest rates. In fact, what I am seeing thus far are sellers opting to lease their homes if they can't get what they believe is an acceptable offer price.
Still, I expect that we’ll see more (very) confident folks showing up at open houses looking for deals at 2010 prices. I am of the opinion that there were many people who stayed above the fray and patiently waited on the sideline for this day to come. Such home buyers believe that this slowing market is their signal to come out of hibernation and "cut deals".
And there will be “deals to cut”. Situations will arise and savvy buyers will seize the opportunity presented to them and buy at a bargain price. Less competition means more homes will come on the market that will not receive multiple offers and will thus present such buyers with the opportunity to negotiate down, not only the purchase price but perhaps some additional buyer-credits while negotiating contingency removals and other matters over the course of escrow.
By the way, this is all acceptable under the terms of the standard CAR Purchase Contract. Even though it’s an “As Is” contract, contingencies contained in the contract give the buyer the right to make requests of the seller, which in turn the Seller can 1) agree to, 2) not agree to, or 3) present the buyer with a counteroffer. There are, however, other buyer strategies that arise in this sort of “slowing” market that are not consistent with the terms (or the spirit) of the CAR Purchase Contract and there are even some buyers who pick and choose which terms they wish to adhere to. Even though some of these are breaches of the contract, they do arise in some transactions.
So, as we launch into the new year, realizing that we are shifting into a (well, maybe not quite a buyer’s market but, certainly not a market that favors sellers) and, based on my experience in past "buyers markets", here are some examples of “bad buyer tactics” that you might experience while selling your home in 2023.
10 Signs that You’re in Escrow with a "Bad Buyer"
I will be posting some suggestions of ways that Sellers can protect themselves from these scenarios in one of my future postings. The fact that these sort of things go on demonstrates the importance of working with an experienced, proactive listing agent who can mitigate or prevent some, or all of these situations from arising.
If you have questions or would like to know how to protect yourself from these types of situations, you’re welcome to contact me at the phone number or email address provided on my calendar.
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99 Ranch Market Coming to Westwood . . . Soon!
I have it on good authority that 99 Ranch Market will be opening in Westwood in February 2023. The market has taken over the location at Westwood and Rochester, previously occupied by Ross's and Border’s Books before that. If you’re not familiar with the 99 Ranch Market chain, don’t worry, you will be very soon.
I’ve been tracking the progress of the build out of the old “Ross’s” space for at least two years now and I am jumping out of my shoes with excitement. Why? Because 99 Ranch is the ultimate Pan-Asian supermarket. Until now, I have had to drive out to the Van Nuys branch to buy Asian produce and groceries, so for me, a Westside location is a game-changer.
I’m pretty sure that this will be the first Asian supermarket on the Westside and with our culturally diverse population this is long overdue. Foods and goods from: China, Japan, Korea, Thailand, and more will be featured in good variety.
I dropped into the Westwood location during construction and had a look around. The main floor will be the market portion of the complex and it is huge! It will offer plenty of room for the diverse varieties of Asian produce and groceries. The upper level is nearly as large a space and will be reserved for a huge food court (aptly named “Eat Up”).
99 Ranch Market is an American supermarket chain owned by Tawa Supermarket Inc., which is based in Buena Park, California. 99 Ranch has 54 stores (as of June 2021), primarily in California, with stores in other states on the west coast.
Bundy Lock and Safe has been my go-to for all things involving locks and keys, for ages. And they've been a fixture in Los Angeles for nearly a Century. So, I was surprised while driving on West Pico Boulevard to see that Bundy Lock and Safe has added a new location just east of Barrington Ave. at 11662-64 West Pico Blvd. I had only driven by but, it looks like their new home is a very attractive new facility.
Whenever I get a new listing, I look forward to visiting "Bundy" soon after to get my key copies made and I will continue to do so, but now I can pick up some sushi at Murakai Market afterwards.
Note: I drove by the old location and there was a sign in the window directing patrons to the Pico location. I'm not sure if they are closing, or renovating the old location. I will post an update when I learn more.