Maybe you are one of the many who have been given the very unique and thrilling opportunity to finally live in the LA region and call the beach, the atmosphere, and of course, the weather your home. Much like the city itself, the real estate market also has a similar feel, especially for the investors and the homeowners in the market. In fact, the real estate market of LA is known to be a premier market by the investors themselves- meaning that if you look at the price flow on a long-term basis, the chances of investments and buying property are all there.
However, due to the circumstances of today, COVID-19has brought LA to a very rough halt, and perhaps you find yourself in a situation where you are looking for a new home to stay in while the pandemic starts to die down. Still, despite these intentions- thanks to the strict guidelines placed for social distancing and so on- it makes the buying process a lot more different, if not more difficult than it did before the pandemic started. Business is still booming but to the realtors involved, it is merely half of the job of what was before.
That is why in this article, we are going to provide sufficient answers for those questions you often nag at your spouse or family members for, or even your own realtor about what to do regarding the situation of COVID-19 and the way it impacted the real estate market here in LA.
As many during the pandemic in the state of California were impacted financially, the same went with the real estate. That means prices are dropping by the second, and realtors are realizing that as well. Though depending on the way the seller feels about the situation, it is most likely that these realtors/sellers would start to receive lowball offers and have the viewpoint of hoping the economy recovers so that the market goes back to its strength.
For the buyers, they will have the feeling of finding the right opportunity to buy and commit to the property they sought their eyes on in terms of the market value. They also try and seek on those rare cases in the market that will allow for offer making on these properties with little to no competition than there were before.
When it comes to the overall number and the prices for the property, the average home value within the LA region is roughly $750,000, at least according to Zillow. in this past year alone, the price had gone up to a total of 5.8% with an expectancy of having a fall of .4% in the next year, most likely due to the pandemic. This makes the market interesting as the rental prices also dropped as well, being the first in over 10 years. In fact, according to a study done on the real estate market, the guidelines done to combat the pandemic will have caused a 2% drop in the rental rate in the LA area if it continues any further.
Since we are in the middle of a pandemic, the chances of a view in-person are very slim, if downright impossible to do thanks to the strict guidelines and quarantine orders done by the officials in LA. Therefore, the one way to view the property at all would have to be via online. There, they’ll provide photos of the property done by the seller. In some cases, there are also the chances of having a virtual tour of the place- allowing to have a better feel of the place as if you ae actually in the property itself.
In a few rare cases, there are some agents who will let buyers view the property and tour through it in person, but only when they are vacant and less busy. In fact, there is an added bonus to that thanks to the California Association of Realtors, they have agreed that the buyer can contact the seller without the middle man involved, making it easier to view and tour around the property. Of course, due to the guidelines, no more than two people are allowed inside the property, and have to wear gloves and other necessities needed for social distancing during the viewing.
As the banks are beginning to thin and tighten up, if you have an already steady credit score and financial records, then you are in perfect shape to get the finance you need for the property. For loans, it is a bit harder to get due to the pandemic as they are suspended.
On the good side though, the rates for mortgage are to remain low or at least they are to be expected to be during the pandemic. This and what the Federal Reserve issued regarding a 50point cut to the interest rates to try and counteract the negative impacts on financial real estate markets, allowing beneficial help and affordability in housing. Of course, if you ever need further assistance and guidance, make sure to contact a local LA mortgage broker for any questions and concerns.
One of the things you should bear in mind is the buying process.
The buying process can take a lot of time, especially more so than before the pandemic. Since the market has been majorly impacted thanks to the effects of the COVID-19 and the social distancing guidelines presented, it makes it much harder to get the property you want to invest in. Be it from viewing it to figuring out who to speak with due to the circumstances, there is a lot that you would have to consult with your local realtors and agents.
Thanks to the CAOR however, there is a clause called the COVID Amendment, or the Coronavirus Amendment. What this amendment does is allow the close for escrows to be done up to a 30 day period, making it easier for anything that may arise within the property. During this time, the party can withdraw if they need to from the deal and the deposit will be reimbursed back to them as if nothing happened at all. That way they still have the money in their pockets in case things go south.
It is a good tool to use in these times of stress, allowing a renewed interest and confidence in the real estate market.
Sync Brokerage Real Estate of Los Angeles
Woodland Hills Office
22020 Clarendon St. Suite 200. Woodland Hills, CA 91367
Intersection of Ventura Blvd., & Topanga Canyon Blvd.
Studio City Office:
12258 Ventura Blvd, Studio City CA 91604