The Los Angeles Real Estate Market in 2013: Is it Time to Buy or Sell?
How many times have you heard a Los Angeles Realtor tell you that it’s “time to sell”? Most Realtor’s spout that term and the other famous term “time to buy” quite frequently – especially in today’s market. The irony with these statements is that there just might be a time to buy or a time to sell. Even a broken clock is right twice a day.
Today, we want to concentrate on the term “time to sell”, which can be motivated by a number of events or factors, such as finding another house that you “just have to have” or a job opportunity that requires moving. Another possible motivator in selling your home might be determining that a high water mark might have been reached in the value of your house and selling now will provide the opportunity to obtain your equity from the sales proceeds.
Determining when it’s time to sell your home in Los Angeles requires knowledge about the real estate market which requires that you know everything you can about selling homes (values of competing and available homes on the market) and buying (number of buyers in the market). It goes back to the supply/demand ratio and the balance or imbalance of homes and buyers in the market. Currently, there are more home buyers in the Los Angeles market than sellers of homes. Prices are up over the last 12 months, but are they topping out or still have a long way up to go?
This situation can best be explained by an event that took place back in the 1920’s, when Joseph Kennedy was having his shoes shined by a man at a shoe shine stand. While the man was shining his shoes Mr. Kennedy was listening to the man tell him about the stocks that he was buying with the money he was earning from shining shoes. Mr. Kennedy listened intensely to what the man was saying. When the man was done shining his shoes and Mr. Kennedy was walking away Mr. Kennedy said to himself “When the man who shines my shoes is also buying the same stocks I’m buying, it’s time to get out”. Later Mr. Kennedy credited this event with his decision to sell most of his stockholdings prior to the stock market crash in 1929 and thus avoided the terrible losses that so many others suffered on that fateful day in October.
The moral of this story (to consider) is that it’s possible that the “time to sell is when everyone else is buying”.