You have been trying to buy a home in Los Angeles for a long time now. How has it been going for you? Don’t answer that. I know. Depending on the area you are looking in or the type of home, either there is little or no inventory and huge competition or inventory is listed at ridiculous price points so you are priced out of the market. And then you have homes that seem too good to be true: they are exactly what you want at a price within your range. You jump on making an offer only to find that it ends up in a huge bidding war and being sold for way over the asking price. And I am talking about $100K to $300K over the asking price.
What is going on? Well, with low inventory, historically low interest rates, and a glut of buyers, competition is stiff.
I am often asked if this is really the right time to buy? The answer to that question is ‘the right time to buy is when you are ready to buy.’ You are never going to be able to pick the bottom or top of the market, and although interest rates are rising, they are still historically low. Believe it or not, in 1981 the average mortgage rate was a whopping 17%. That puts things into perspective.
So let’s take a deep breath and rethink our plan of action. What about widening your search?
Location is a major item on most people’s list of criteria for a home search. In a buyers’ market, when there is an abundance of homes on the market, you can afford to be picky and wait for most of your list of wants to be filled. But in a sellers’ market, few homes chased by multiple buyers, then you may want to rethink your wants and needs.
Location is usually at the top of the list. When you think of buying a home in Los Angeles, you may be thinking of the Westside, beach areas such as Santa Monica, Marina Del Rey, Venice, or Malibu, but today, especially if you are a first-time home buyer you are not going to be able to afford those neighborhoods. The median price for single family homes in these areas is $2.960M. And for areas such as Westwood/Century City, Beverly Hills, West Hollywood, the median price is $3.568M. Even neighborhoods that used to be more affordable like, Palms/Mar Vista, West Hollywood, and Beverly Center/Miracle Mile have a median price of $2.054M.
This is where we look around for areas we may not have thought of, where we can afford to live and maybe grow to love.
Currently the San Fernando Valley (The Valley) seems to be an option for those priced out of other Los Angeles areas, and homeowners have been taking advantage of the situation to put their homes on the market. (Areas such as Encino with a median of $1.939M, and Studio City with a median of $2.209M can be excluded from your search). Yes it gets hot in the summer, but depending on your commute time to work, and the the opportunity to work from home, you may find that you are getting so much more for your money. There is always air-conditioning and a pool. Burbank for instance, which has some of the top ranked public schools in California, has a median home price of $1.265M. North Hollywood’s median is $942K, and Van Nuys $871K. Some of these neighborhoods are already gentrified, and some are up-and-coming, which will make for a good investment.
Until recently homes in The Valley have been swept up as soon as they came on the market, and prices have been going crazy; but lately I have seen a little slowing down of the frenzy. Check out The Valley, especially if you are a first-time buyer. I think you will be pleasantly surprised. You may actually end up with a home you love that you can afford.
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