Have you heard that the real estate market is slowing down? That prices are going to drop and you should wait before you buy a home? Let's discern fact from fiction, shall we? Read on to get key notes about prices, inventory, and interest rate for the Los Angeles County market for 2021.

PRICES

Let's start with prices. Prices have been appreciating in the double digits at a rate of about 18% - 20% in the past couple of years. Experts are predicting that prices will continue to appreciate in 2022 but at a slower rate of about 3% - 6%. Headlines can be vague or misleading so make sure to read the fine print. When you read "slow down" do not interpret that as prices decreases.

Fiction: Prices are going down.

Fact: Prices are increasing just at a slower rate.

INVENTORY

We were starved for inventory in 2020 as many homeowners did not want people walking through their homes during a pandemic. However, with the wide distribution of vaccines, more and more homeowners are feeling better about having people in their homes, which means more properties coming up for sale. When you hear "cooling off", it just means buyers are competing against 10-15 other offers instead of 30+.

Fiction: it is becoming a buyer's market.

Fact: It still is a seller's market, just with a tad more homes for buyers to choose from. 

INTEREST RATE 

Interest rates have been below 3% for a good stretch of time now. But experts are predicting they will increase above 3.5% in the coming year. 

Fiction: If you wait, you will get a better deal.

Fact: Increase in rates, means decrease in affordability.

In summary, the real estate market is cooling down it is returning to some semblance of "normal". Reports about a "cool off" are comparing today's market to where we were in 2020, which was anything but normal. In 2020 the increase of prices and volume of sale plus bidding wars were disproportional to most other years. 

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