When giving the State of the Union address, the president usually starts with “The state of the union is strong,” and then there’s lots of applause. With that in mind, the CA Managing Brokers wish to say that the state of the California market is strong.
[We are pausing for your applause. And … OK, we’re done pausing.]
With 2023 behind us, 2024 has us looking at what is arguably a very strong market. That’s not to say it’s what one would call a “rational market” (which is evident from some of the charts you’ll see on the next few pages).
As we look at the numbers, keep in mind that California is a huge state with many sub-markets, so your mileage may vary.
- December 2023 had 224,000 existing home sales, which is down 7.1% from December 2022, with 2023 coming to a close with 24.8% fewer home sales.
- The median sales price statewide was up by 6.4%.
- Velocity increased (that is, DOM decreased) by 21.2%.
- Unsold inventory was down to 2.5 months, which is close to 4% less than last year.
The drop in inventory puts more pressure on an already squeezed market and competition is pushed further up for listing agents, buyer’s agents, and buyers themselves. Interest rate increases led to some buyers leaving the market, and those that stayed in the market now must scramble to find insurance, which can be cost prohibitive.
As for the brokerage community at large, there were the NAR scandals and the commission lawsuits. What does this mean for agents as a whole? With apologies to Big Daddy Kane: “Agentin’ ain’t easy.”
Supply and demand may be out of our control, but we can control how we comport ourselves. Now is the time to demonstrate how you offer services and possess knowledge that is specialized, important and valuable.
Actionable Advice for California Agents
Look for Ways to Increase Inventory
Supply and demand is a general market force way beyond our control, but you can increase personal inventory. For example Gen Xers are starting to retire, so there’s an opportunity to market to them with creative solutions for selling their homes, or use the equity in their homes to buy a property for their children (and even grandchildren).
Learn About Investment and Commercial Properties
Networking opportunities abound. Use the resources available to the Side Community to learn more about investment asset classes and educate your clients.
Add Leasing to Your Practice
Tenants become buyers. Property owners become sellers and buyers. Why not make money off long-game prospecting?
Partner with Other Agents
Whether it’s on a client-by-client basis, bringing a new member onto your team, or forming a team of your own, with the market as tight as it is, combining your efforts can create something more powerful than going it alone.
With so many things in flux, it is especially important that you show buyers and sellers that you understand the market, that you can creatively navigate the hurdles that may arise during the transaction, and that you’ll be a trusted real estate advisor for the next deal (and the one, two and three after that).