Let’s take a look at the trends in the North and West San Fernando Valley for the last 3 months as well as year over year. Looking at just single family home sales in these markets, I look for trends in price and volume. While each neighborhood will have its own variables that effect the price, with this analysis I am sharing general trends in our local markets.
As I’ve discussed previously, the rise in interest rates and continued inflation are causes changes in our market. When interest rates were in in the 3s a buyer may have been able to afford a $1,000,000, but now with interest rates in the high 5s that same buyer may only be able to afford a house in the $800,000 price range. As interest rates are not expected to go lower anytime soon, the adjustment is coming in house prices. This is good news for buyers, since they will be paying less for a home they will see savings in their property taxes. In the future they will also have the potential to refinance their loan if/when interest rates drop. The good news for sellers is that homes had such HUGE gains in value over the past 2 years, that when looking at the year over year change in prices, we are still seeing increases. Home values are still well above where they were 2 years ago. Given the shift in the marketplace, sellers need to be aware when pricing their homes for sale and should work closely with the agent in making adjustments as the market demands.
In the North Valley, we saw a leveling in the number of closed escrows in July and August. They are down almost 25% from June to August as the market adjusts. As we head into the fall and holiday season we may continue to see that number decline as traditionally sales slow in the fall. As you can see, the year over year price for a home is still up almost 10% in the North Valley and almost 12% in the West Valley! The West Valley did have more escrows close in August, which is a good sign that buyers continue to have interest.
We will probably see more price adjustments, as we settle in to this more “normal” market. If homes are priced properly, they will have a better chance at spending less time on the market. As both buyers and sellers adjust, we need to remember to have some patience and that there are still some great deals out there to be found.
Ultimately, when it comes to price, it will always come down to condition, area sales and what others are willing to pay for the same house. If you are interested in learning more about your options or discuss this in more detail, please feel free to call or email.