State of the Market llast updated on 30 August 2008
How's the Westside market? In a nutshell, it's a bump in the road compared to the Inland Empire, and it's a lot better than the last downturn in the early 90s.
Do your own homework. If you're a numbers person, take a look at the pages called Housing Prices. Some of this data is unsettling, and much of it points to real estate as a sound and unparalleled investment. A Santa Monica listing of mine received 9 offers just before the 4th of July and closed escrow on 8/22/08. Another property was essentially on the market for 9 months (an apartment building) before the seller agreed to terms and opened escrow.
Each facet of the market is a little different. So it's in your best interest to find a realtor who will be supportive and understanding where both your short- and long-term goals are concerned. Again, do your own homework on that search as well.
Prepare yourself for a real estate sale or purchase with national and local objectivity from objective sources; don't simply rely on realtors and their perspective. Some Westside agents are renters! Most realtors are salespeople as opposed to consultants, and we are all slightly biased. This site was created and is updated personally to inform and help my past and prospective clients from an educator's vantage point.
Personal Perspective - Just 2 minutes to spend while you're at work surfing the net? At the very least, view the page entitled Housing Prices; this data is from the U.S. Census Bureau, The Office of Federal Housing Enterprise Oversight, and the local Multiple Listing Service. It is staggering evidence to support home ownership. "The investor of today does not profit from yesterday's growth." - Warren Buffett
As a former teacher and relatively new parent, I strongly recommend reading the Homes & Children page for a Harvard University paper about the relationship between home ownership and academic success. This paper will take more than 2 minutes of your time, but it should prove to be an invaluable investment.
The use of the term "bubble" is selling a lot of newspapers and magazines lately, as well as fueling the fire for "water cooler" conversations, not only throughout the country, but around the globe. I try to read both the Journal and the Times every morning. Arm yourself with these and other resources, and the decisions should be made that much easier. It should be said that these articles were not hand-picked for their positive spin, as there are many negative reports in this collection.
Did you know that the average yearly growth in housing in the 67 years between 1940 and 2008 has been 6.45% in the U.S. and 7.05% in California?
First and foremost, real estate is best seen as a long-term investment, as well as simply a place to call home - the American Dream. This perspective is evidenced in the Census Bureau data. During the course of owning a home for 30 or 40 years, there will be several peaks and valleys. Generally speaking, when you sell low, you're going to purchase low when replacing that home and vice versa. The obvious exception is when moving from a hot market to a declining one. Long-term real estate investments are the route to take for early retirement and financial strongholds. I'm invariably looking for potential investments, as most experienced realtors make nearly as much, if not more, from their own investments as they do helping clients.
However, many people these days are very hesitant to buy property at what they see as the "top" of the market. In the 1970s, after prices increased by 300% that decade, many people must have had these thoughts. Here is some (hopefully) objective evidence to use as motivation. If you are a first-time buyer or would simply enjoy a good laugh at possibly your own expense, follow this link for a New York Times article entitled Fear of Committing? If more is needed, read the Lombardiesque section called Income Property; there's a button for it on the left as well.
Vacancy rates are down for rentals, and falling; interest rates remain incredibly (historically) low; the national and regional economies are stable, if not strong; where else can the prices continue to go (over the long-term) with these conditions? It is somewhere between difficult and impossible for some people/families to enter the local market. See the Housing Prices page for more statistical data.
The period between 1999 and the 2nd quarter of 2006 was a good run, to say the least, but it is not without precedent. What will the next few years hold for the market? No one has the answer to that one, but if you are in this for the long haul, it simply doesn't matter. If you've waited at the sidelines for the past few years, you may have missed the boat, at least in California. Prices will eventually level, fall, climb, etcetera. Imagine buying a home in 1978, and 30 years later you are ready to retire. The value of your home could have been $50,000 then and $1,500,000 now... Again, and lastly, housing values invariably decline at certain points in the cycle, but they will increase at a staggering pace during the course of home ownership. See the data from 1977, 1989, and 2004. I will help guide you through this process with the best advice I can give.