Houses that would have sold in multiples last year are sitting.
In studies of markets, the big variable is always “sentiment.” How are people feeling? Sentiment is not what it was two years ago.
Interest rates remain high (with no imminent decline forecasted) and L.A. can’t seem to catch a break these days. Even my rental properties are sitting.
Buyers will put up with a lot if they know their house will be worth more next year. They will stretch their payment to the max. They will buy fixers. But when appreciation is not guaranteed, well, they get picky.
And a flat market completely kills the FOMO. Suddenly, no one is in a rush to buy a house if they know it’s going to cost the same next year anyway.
So, there are lots of buyers on the sidelines. No one has to buy a house.
For the record, I have seen zero cause for any downward price corrections. We have sold two foreclosed homes this year so far —both were from flippers who got too far over their skis.
