What the Richcession Means for the Housing Market

January 13, 2023

What the Richcession Means for the Housing Market

What the Richcession Means for the Housing Market

A new year opens the door to new opportunities but it is still too early to determine what exactly will happen in the real estate market as we inch towards the Spring season. 

Inventory still remains low in LA and Orange County, but it is clearly evident that home prices across Southern California are slipping as a result of higher mortgage rates. So Cal home sales during the fourth quarter of 2022 according to CoreLogic fell to 13,016 units in November— a 44% drop in transaction compared to the same time the year prior. 

With that said, we are seeing all sorts of creative moves from both sellers and buyers to make the sales process as smooth for both sides as possible— from seller financing options to longer escrows for buyers to have more breathing room to make the most informed decisions for themselves are just some of the many ways deals are getting done. 

We are also seeing different banks offer attractive lending programs to make the numbers work for home buyers which has resulted in a boost of confidence for both sellers and buyers.  

What We're Reading

There is a lot of talk about the current recession and its impact on the jobs market and the housing market. In fact, there is a term being tossed around recently called the "Richcession" to suggest that the wealthiest are affected much more this time than the middle- and lower-class. One example is that unemployment numbers have improved overall despite there being layoffs at many of the large technology companies such as Meta, Twitter and Salesforce. In addition, the stock market has taken a tumble in recent months which directly impacts the wealthiest individuals more than anyone else. As a result, housing at the higher end may slow down as these individuals decide to wait it out during these times of uncertainty. However, those below the wealthiest class may sense more job stability and confidence in the economy, thus enabling them to buy or sell homes with much more confidence and ease. The article on Richcession by WSJ can be found here.

Read Our January Newsletter Here


Recent Blog Posts

Stay up to date on the latest real estate trends.

Real Estate Market Update - 08/08/2023

August 9, 2023

Mortgage rates have seen a slight increase as of July 27. The 30-year fixed-rate mortgage now stands at 6.81%, up from last week's 6.78%. Comparatively, this time last… Read more

The Market Momentum This Summer

July 10, 2023

We are delighted to bring you some exciting highlights on the current state of the Greater Los Angeles and Orange County housing markets. As we delve into the luxury a… Read more

A Strong Start in Summer Sales

June 9, 2023

The residential housing market in Los Angeles and Orange County has exhibited remarkable strength, marked by high demand and limited supply. This trend shows no signs … Read more

Gearing Up for the Start of Summer

May 18, 2023

The recent rate hikes by the Federal Reserve have had a noticeable impact on mortgage rates. As interest rates rise, mortgage rates tend to follow suit, making it more… Read more

Springing Ahead in the 2023 Real Estate Market

April 21, 2023

As we enter the Spring season of 2023, we wanted to provide you with an update on the current state of the real estate market. In recent months, we have seen a steady … Read more

Spring Forecast for L.A. Home Sales

April 4, 2023

Spring is here and is typically a busy time for our team to prepare our sellers to list their homes on the market. Simultaneously, we have been working diligently to f… Read more

Banking Disruptions - A Potential Silver Lining for Homebuyers

March 17, 2023

So much has happened these last two weeks in the banking sector. The collapse of two prominent banks has caused a state of panic, forcing the Federal government to mov… Read more

Getting Past the Rain

March 3, 2023

Torrential rains and mortgage rates hikes in Los Angeles and Orange County amidst the past several weeks didn’t stop many of our buyers and sellers from making big mov… Read more

The Housing Market Is Off to the Races

February 14, 2023

January was a hot month where we saw buyers jumping back into their home searches as mortgage rates took a brief yet significant nose dive compared to where rates were… Read more

Let's Talk

You’ve got questions and we can’t wait to answer them.