I think it’s good time to buy. What do you think?

Question

We are in the market to buy our third single family home. We live in Orange County, CA and market is extremely competitive for buying . But since last week I am seeing price drop on lot of properties.  I was able to get a deal on property which had reduced price recently. I think it’s definitely buyers market. What are your thoughts and experiences?

Eliott Elias · Answer

Always a good time to buy when you are finding deals

Bill B. · Answer

Is that mostly people fleeing California or Sellers that took the highest comp and added 20%? Anything that’s priced reasonably in Vegas or on Lake Mtka is pending within a week.

I don’t think anyone believes homes will be cheaper in 10 years than today. So buying today is certainly better than waiting. Unless you think you’re the only genius with money waiting for a price drop. :-). 4 months ago it was “foreclosures are up 100%”. 8 months ago it was rising rates to sink real estate market. 18 months ago it was forbearance crash coming, 2 years ago it was Covid crash coming. Check BP forums 3-4 years ago, the Vegas market is bubble. When I was buying 10+ years ago “the next crash is right around the corner.” They’re all still waiting to yell “I WAS RIGHT!”

Ling Lin · Answer

It is hard to predict the market. I have learned that it is never a good time to buy, but there are always good deals. If you find a deal that the number makes sense, you should still buy it if the market is showing downtrend.

Conner Olsen · Answer

@Shefali Golvelker Price drops do not mean it's a buyer's market, it means that the sellers were asking for too much for their house and no one wanted it at that price. I've seen a lot of sellers have unrealistic expectations for the worth of their house which has resulted in a price drop. A buyer's market is where there is more than 6 months of inventory in the market. Right now we are deep in a sellers market with one month supply of homes nationwide (and probably lower inventory in OC). We would need 6x more houses for sale to begin to be a buyer's market. You can still find deals in a sellers market but the sellers still have the upper hand.

Peter Mckernan · Answer

I would say we are still a little bit away from a buyer's market, we would have to be 60-120 days on market or more in the OC market. Right now we are at about 20 DOM (days on market) for the lower end ($500-$750K), the higher priced homes are 20-30 days on the market $1M and $1.25M. I think we still have some time before it's that bottom falling out situation. Also, we are at about 2500-2700 just in OC for active listings, normal is about 4500 active listings. I would keep an eye out, I think there are maybe some other quick deals out there that might be willing to give closing cost credits or something, we will not be seeing a drop of 20% in price right now, so I would say keep waiting to see what the next two-six months hold. I would also check into Steven Thomas he is an economist out of OC that keeps track of all these numbers for SoCal and has a news letter that goes out twice a month (I have no affiliation to him, just follow his stuff to be more knowledgeable on the current market).

Leland French · Answer

I agree with Peter. The current softening is just an indicator of hesitancy. The midterm elections will only deepen that and wintertime lull will further make sellers price lower especially if they need to move quickly. RE cycles are roughly 10 years to full circle so we are over due for correction. Diving economy will also drive prices down. 4 to six months from now will definitely be better than now. but good deals can happen anytime for a lot of reasons. Like properties where landlords can't get bad tenants out thanks to Governor Nuisance. So keep an eye out!

Nicholas Coulter · Answer

@Shefali Golvelker The market is definitely starting to turn to a more buyer friendly environment. Seeing more wiggle room in seller concessions etc at the closing table.

Yesenia Garcia · Answer

I agree with Elliot, a deal is a deal in any market. I work at a wholesale brokerage and I am seeing more and more price reductions on already discounted homes in OC/LA/Riverside. Inventory is still low so sellers have an upper hand but not pricing the way they were a year ago as the sales prices normalize.

I think it’s good time to buy. What do you think?

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