As we turned the clocks up an hour to spring forward, we take one step closer to longer days and warmer weather. Along with this annual occurrence also begins the countdown to the spring home buying season, which traditionally starts on April 1st. With many people also focused on preparing to file their 2018 taxes, some will discover their lack of home ownership isn’t allowing them to maximize their deductions via the mortgage interest write off, while others who are fortunate enough to be receiving a return, may find those extra funds to be just the needed amount to complete the necessary down payment for a purchase. As both situations would create a motivation to buy a home, let’s take a peek at what the Westside market is doing.
In looking at months supply of inventory, which gives us an idea of how balanced a real estate market is, we see year over year from February 2018 to February 2019 in the Westside area of Culver City, supply is up from 2.7 to 4.2 months, a 55.6% increase, and Palms/Mar Vista is up from 1.4 to 3.9 months, a 178.6%. On the other hand, the supply of available homes in Santa Monica is down slightly from 4.6 months in February 2018 to 4.3 last month, a 0.6% decrease. Inventory in West LA is down considerably more, in having 15.6% fewer homes available in 2019 in comparison to this time last year, going from a 5.2 to a 4.3 months supply of available homes. In defining markets, less than 6 months of inventory is considered a seller’s market and more than 6 is a buyer’s market.
Days on market, the other main indicator used to determine the state of a real estate market tell a much different story. If you looked at those numbers alone, one would be led to believe the market has indeed shifted further towards that of a buyer’s market. In all four areas, we see days on market is up considerably. In West LA, days on market is up 14.3% going from 21 to 24, Palms/Mar Vista is up 53.3% going from 15 to 23 days, and Culver City is up from 11 to 18 days, a 63.6% increase. In Santa Monica though, days on market is up a staggering 213.6%, going from 22 to 69 days. Something to definitely be mindful of if purchasing a home there.
In taking a look at interest rates, we see a recent surge in the first week of March, with the 30 year fixed rate going from 4.54% to 4.62%. This is below the 52 week high of 5.1% and just above the 52 week low of 4.54%. With the opportunity to buy down an interest rate, today’s borrowers can still get a rate at 4% or even below, which considering interest rates over the last 30 years, is still near historic lows and a great reason to consider buying a home.
So what does all of this mean for the upcoming spring market? From an aerial view of the Westside, we are still in an overall sellers’ market due to there being more buyers looking to buy homes than there are available to purchase. And yet, depending on which area of the Westside you’re considering, it may resemble more of a buyer’s market. In the end though, when you factor the additional influx of buyers that typically come with the traditional buying season and interest rates that are still very favorable, buying a home on the Westside over the next for months, may greatly resemble the market we’ve grown accustomed to…well priced homes in good condition and location selling quickly and often times in multiple offers. Don’t fret too much though, the start of the buying season also brings more inventory to the market, meaning there will be more homes to choose from for those buyers who have been properly educated about the current market and are ready to move…quickly if needed.
If you have any questions about the number of months supply and days on market for homes in your area or would like to become better educated as to the LA Westside real estate market in general, don’t hesitate to drop us a line or shoot us a text at 310-403-7381. If you prefer, you can send us an email at firstname.lastname@example.org.