It's no surprise that the real estate market is currently booming, making Los Angeles County one of the hottest seller's market's in the country. The combination of tight supply and high demand has generated a significant surge in home values this year, leaving sellers with a nearly 54% increase in net cash gain from 2020 (according to C.A.R research). As a result, homes are flying off the market faster than ever and often selling more than the asking price. Seller's should take full advantage of the current high resale value and consider new equity built to fund retirement, the purchase of another home, or other investments.
Home Prices Are All Expected To Drop in 2022
A number of factors have directly impacted the rise in property values this year, including uncertainty in the economy during the COVID19 pandemic and government aid in low mortgage & interest rates. However, with COVID cases continuing its steady decline and the economy set to stabilize in the coming months, interest rates are expected to experience an uptick which will drop property values as early as January 2022.
Mortgage Rates are Historically Low
Mortgage rates have been at historic lows this year averaging about 3%, a massive dip from the previous 5%-7% in 2018. The current low rates boost buying power and make homes more affordable for anyone looking to relocate or invest elsewhere.
Take Advantage of Tax Deferral with 1031 Exchange
A 1031 exchange gets its name from Section 1031 of the U.S. Internal Revenue Code, which allows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value.
New Legislation: SB8, SB9, SB10
Governor Newsom recently signed legislation aimed to increase affordable housing supply, in another attempt to tackle California’s housing crisis. The general idea of Senate Bill 8, 9 & 10 has been to streamline state laws to boost housing production and tackle systemic issues regarding the balance of supply & demand on market. What does this mean for you?With the recent legislation streamlining the process to get development plans approved, developers want to purchase residential lots now more than ever, making your property more attractive to buyers. Be aware that the expected 84,000 new housing units will combat the current housing shortage, and decrease property values.
The Bottom Line
Your home's value is likely the highest it's ever been. Sellers are advised to take full advantage of the current high resale value and consider new equity built to fund retirement, the purchase of another home, or other investments before this trend is likely to end at the start of 2022.
Interested in Selling?
Ikon Advisors is one of the leading real estate development agencies in L.A with professional buyers $ investors on standby, wanting to purchase your property in any condition on your terms.