During the summer, which is considered a prime season for real estate sales, according to senior real estate agent Roy Zhang from Landmaster Realty in Southern California, there has been an increase in available properties for sale in the local real estate market. This has led to buyers gaining a stronger position of advantage, while many homeowners also believe that now is a good time to sell their properties.
Overall, Roy told Dajiyuan reporter that due to various factors such as housing inventory, mortgage rates, and purchasing power, although current house prices appear relatively stable and not seeing the significant surges seen two years ago, buyers are relatively in a stronger position. He mentioned that “buyers are gaining momentum while sellers are losing steam.”
In Orange County, Los Angeles County, and Riverside County, house prices have slightly decreased compared to the previous month, which Roy considers a reasonable adjustment. The median house prices in Orange County are around $1.4 million, in Los Angeles County $900,000, and in Riverside County $650,000. Homeowners who have been waiting are now starting to list their properties for sale.
Roy mentioned that house prices in the Los Angeles area have risen by an average of about 6% compared to the same period last year, with Orange County experiencing a larger increase compared to Los Angeles and Riverside counties. Most buyers are able to make deals close to the asking price. In Orange County, houses priced between $2.5 million to $3 million generally sell above the asking price, while those priced between $700,000 to $2.5 million usually sell at the asking price. However, very cheap houses often do not sell at the asking price due to evident flaws and poor conditions.
Why has there been an increase in available properties in the market? “Of course, there are various reasons,” Roy explained. “Normally, reasons could include changing schools, jobs, among others. Some homeowners have been wanting to sell their properties; they were just waiting for the right moment.”
The Mortgage Bankers Association announced on Wednesday that the 30-year mortgage average interest rate has dropped to 6.44% this week, the lowest point since April of last year. The rate decrease is good news not only for buyers but also for sellers. Some sellers who have been considering moving are now taking action due to the lowered interest rates, which has led to an increase in available properties for sale.
Other homeowners choose to list their properties because they feel that policies towards tenant protection have become more strict (such as the restriction on collecting only one month’s deposit starting from July), increasing the cost and risk of property ownership. Seeing the current decent and relatively stable market prices, they have decided to sell their properties.
Based on the current real estate market conditions, buyers are now faced with multiple options in their target areas. When properties were scarce, buyers had limited choices, but now with more options available, they are in a better position. Before selling, sellers typically reference recently sold nearby properties. Buyers are no longer rushing to purchase like two years ago, so sellers are cautious not to overprice their properties.
Regarding recent changes in real estate transaction commission payment rules starting from August 17th, buyers may now have to pay their own agent’s commission and sign a viewing contract with the agent before viewing properties. Some agents are not yet clear on this, causing uncertainty among some buyers, potentially delaying their purchase decisions.
Furthermore, expectations regarding interest rate changes may also cause some buyers to postpone their purchases. Roy explained, “Because everyone has the mindset of ‘buy when prices are rising and not when they are falling’. Apart from those who must buy due to factors like children changing schools or adults changing jobs, most buyers do not need to rush into the market, contributing to the stability in house prices.”
He also added, “In other words, some buyers have been waiting for years to buy a house, and in the past couple of years, they couldn’t afford it. They are not in a rush to purchase within the next couple of months, so current buyers are more patient than before.”
Finally, the upcoming November elections have also made some buyers adopt a wait-and-see attitude. Roy believes that after the election results are announced, the economic and policy trends in the US will become clearer, prompting some buyers to make their final decisions on whether to enter the market.