By Michael Morabito
An increasing number of my clients have asked whether the real estate market is still rising and if we are still in a “Seller’s Market,” and if so how long before we might see a correction?
Many people have heard national or local chatter about slowing of the market and have noticed inventory sitting for longer or have been watching interest rates tick up. Naturally, there is concern in the air especially after we have a seen a bull run for the last 6 years unlike anything we have seen before, which has exceeded almost everyone’s expectations.
However, there are a couple key points we must keep in mind when discussing the market: 1. Culver City Real Estate is unlike any other real estate market in the nation. 2 Culver City Real Estate market is unlike any other real estate market in Los Angeles. These points are important as we are gathering around the dinner table for the Holidays and catching up with friends and relatives from all over the country. What is happening in your family and friends neighborhood is unlike anything that is happening in our neighborhood. Even if that person does live in the LA area but does not live in Culver City – there still will be differences.
Whether one is in the market that favors Buyers or Sellers can vary from specific neighborhood and price ranges.
Perhaps one of the best indicators of a real estate market’s health is the inventory of homes available for sale and the absorption rate or rate of sales per month. Currently, we have around 35 homes for sale of active inventory and in September of this year there were 22 homes sold and for October of this year so far there are 25 homes have sold for an average absorption rate of 23.5 homes per month. Which means at the current rates we would sell off inventory in less than two months. The absorption rate in September 2017 was 23 homes and in October 2017 was 19 homes, for an average absorption rate of 20.5 for those two months.
On average we are absorbing about 20 homes per month. A housing market is generally considered to be in balance (between buyers and sellers) when these levels hover around five or six months of supply. As the numbers indicate, inventory would take less than 2 months to sell off at our current rates of absorption at 20 homes per month.
Still not convinced? What if I told you these impressive inventory numbers and absorption rates all occurred in a rising price environment and rising interest rate environment. Note that as of end of October the median asking price for Culver City homes is up to $1.4 million and the average list price is up to $1.5 million! In the luxury market, in 2017, we had 1 home surprass $2.5 million sale price, so far in 2018 we already have had 3 homes top the $2.5 million mark with few more on the way. Prices are in fact at all time Highs well beyond 2007/2008 numbers and there are still plenty of buyers in most price ranges.
Paradoxically, homes have been sitting, and average days on markets have risen compared to a year ago at the same time which may indicate a slower but steady pace moving forward or maybe prices have simply caught up to demand or maybe uncertainty with mid term elections, the stock market or the coming holidays have slowed the velocity of the market. Whatever the reason, we are still in a Seller’s market.
In a future article, I will give my opinion as to where we are headed in 2019 after we have received fourth quarter numbers and mid-election results. For now, enjoy living in one of the idyllic places in the country and as you gather for the Holidays remember you do live in a unique, maybe even superior place than rest of your family and friends.
Michael Morabito is a top Realtor in Culver City who helps counsels Culver City residents regarding their property values, navigating selling and purchasing simultaneously, life styles and investments, he can be reached at 310.844.5703 or michael.morabito@compass.com