I’ve been advising people lately to think carefully about how long they want to hold onto their Southern California real estate. Those planning to buy right now should plan to keep their homes for 5 to 7 years and possibly longer. Why? It’s likely the region is already at or is approaching a peak in home values, and the usual time from one peak to the next is somewhere between 7 and 10 years with a valley in between. Since Southern California’s last peak in home prices was about 13 years ago, it makes sense that we’re near or approaching one now.
It’s impossible to know how deep the next valley will be or exactly when it will come. However, it’s clear that the market right now is probably the most favorable for sellers that it’s going to be in the next few years, especially if widespread unemployment continues. At the moment, there are relatively few homes for sale compared to the number of those who want to buy them. If many people continue to be unemployed, more people will be forced to sell their homes as their savings runs out, and more potential buyers will not be able to buy because many of them will be unemployed as well. Given this line of reasoning, those who want to cash in the equity growth produced over the last 7 years and those who want to move to less expensive markets should seriously consider selling in the next few months.
If you’d like to have a no-pressure conversation about what would be best for you in your specific situation, call me today at 626.328.4199.