The market has been feeling the heat from rising mortgage rates, and people who were already overstretch had to pause. Now price reductions are more common, and I see places in escrow coming back on the market. Currently, properties are still trading, and prices are probably not going down that much, maybe a little bit; most likely, they will stay flat.
We still have a supply issue, and there are more buyers than sellers even though I did see an uptick in sellers lately trying to time the top of the market, which it will work against them since it will increase supply and give buyers more power.
This is a healthy adjustment; buyers now have a better chance of securing a place and should take advantage of that.
Regardless of what tax advantages are and other reasons, you might tell yourself you should buy instead of renting in my opinion, the two biggest reasons that you should buy are:
- Make sure your rent won’t go up for 30 years. This is huge; imagine how much easier it is to plan your life and future when you know this variable will stay the same. Rents go up yearly, and the rental market is extremely hot in LA now. This reason alone should convince you.
- Automatic savings. When you buy Real Estate and pay down your equity, you are automatically putting money away every month in a savings account. You can’t touch it without selling or getting a home equity line (which is not as easy as it seems) and can’t expend it, so it’s an excellent way to have a nest egg.
Now there are many other reasons, like tax savings, being able to customize and improve your real estate and make it more valuable.
6.2% interest rate is still cheap money, not like the beginning of the year but historically very low; if you are buying for the long term, still a good time!