Los Angeles real estate agents have had a record-setting 12 months as home buyers fiercely compete for their slice of the action. There are a few trends driving these buyers to bidding wars for top properties in LA.
First is the covid pandemic’s shift in lifestyle choices. People are seeking large compounds with plenty of outdoor space and home offices. The privacy and security of a large estate are primary concerns for new buyers.
Second is rising rates and the hope that this is a last window of opportunity before borrowing costs rise. The Fed recently raised rates by .25%, the first rate hike since 2018, and plans another six hikes by the end of this year to cool down the highest inflation in 40 years.
Third is rising inflation and the knowledge that real estate is a great hedge during such times. As home prices rise due to inflation, the loan-to-value of mortgage debt decreases. This raises equity but keeps mortgage payments the same. Inflation also affects rental properties, as higher home prices result in higher rental payments.
These trends brought a record year for real estate agents. The Altman Brothers claimed the #2 ranking in Los Angeles with $1.5 billion in sales. With inventory at rock bottom levels, the importance of having a skilled agent to compete has skyrocketed along with the home prices. Will 2022 be another spectacular year for the real estate market? A slowdown isn’t in sight.