Lower cost neighborhoods have unsold homes
In a tale of two cities, the early Spring analysis shows wealthier neighborhoods are short of supply, well priced properties are getting multiple bids, and many deals are still cash. Go further inland and the speculators have been priced out of the market, and the buyers who are interested in those price points either can't qualify or aren't ready to pay the sky high prices in those neighborhoods.
What will happen as we get closer to Summer is anyone's guess. Overall inventories for LA county are still at historic lows with under 18,000 single family dwellings on the market. This compares with normal levels between 30,000 and 40,000. But as we noted in a previous post, the equation for renting vs buying has tilted toward neutral. It would appear that many renters are happy to stay put until the pricing is more stable or the mortgages become easier to get.
The irony, of course, is that mortgage rates are low and dropping. Getting into a home now is almost certainly going to cost less than in the future. Prices would have to fall a lot to make up for normalized interest rates of 6% or higher. Consumers aren't very savvy, being more likely to respond to emotion, trends, and headlines. Right now the headline is high prices and little choice.