What’s Been Going On?

The past two years we’ve seen an unprecedented Real Estate market. In response to the Covid-19 pandemic, interest rates reached historic lows, hitting as low as 2.65% in January 2021. Getting a low interest rate results in really lowering your mortgage payment, so buyers can afford more and have more purchasing power. While this was happening, inventory was dwindling as homeowners were reluctant to sell during the pandemic and building materials became scarce and expensive. This simultaneous increase in buying power while home inventory became limited resulted in the recent competitive Real Estate market where prices skyrocketed, homes were receiving multiple offers, and buyers were removing contingencies. This time was an amazing opportunity for sellers to get top dollar for their home and a great chance for buyers to lock in a historically low interest rate. 

What’s Changed?

As we come out of the pandemic, the Consumer Price Index, an important gauge of consumer inflation, has increased by 8.5% – the largest 12 month spike since 1981. To curb this inflation, the Fed has been raising interest rates. As mortgage payments increase, buyers are losing purchasing power and can’t afford the same purchase price they could a month ago. At the same time, inventory is also increasing as life resumes to normal and homeowners are comfortable putting their homes on the market. This new sudden combination is a stark contrast to what we have been seeing the past two years. it may seem scary but it’s important to understand that the market isn’t diving or tanking, rather, it’s returning to a normal balanced market between buyers and sellers. 

What does this mean?

Sellers should understand that as inventory and interest rates rise, we will see more price reductions and longer days on the market. Pre-pandemic, homes would take an average of 45-60 days to sell, but we are currently used to an unprecedented market where homes have been receiving multiple offers within days. If you’re thinking about selling, now is the time… because interest rates are expected to continue to rise and buyers will lose further purchasing power. It’s also more important than ever to choose an agent that knows how to market your property properly, make it stand out, and price it correctly. 

For buyers, this is an amazing opportunity if you have been waiting on the sidelines the past two years. Getting your home won’t be as competitive, and you’ll be able to write offers with all of your contingencies in tact, and possibly get an offer accepted under list price. Additionally, interest rates are expected to increase even more in the next two years, making monthly payments more expensive. A 30 year fixed mortgage has become the standard, but there are other options available as rates continue to increase. We recommend speaking to a lender to see what options may be available. Lastly, as interest rates rise, typically rent prices follow. As rent increases, start building equity in a home as soon as possible instead of for your landlord.

If you have any questions or want to discuss your options, please email us at Kara@Katzgroupla.com or call/text 323-599-7753. We are happy to help in any way we can!



Looking to buy or sell? Contact us to learn more about how Katz Group LA can assist with all your real estate needs.


Michael & Kara Katz are a dynamic real estate sales group, specializing in residential and commercial property sales across Southern California. With more than 10 years of real estate property development, construction and sales experience, Michael & Kara bring a wealth of knowledge and experience to every unique sale and listing they manage.


Kara: (619) 850-4106

Michael: (323) 599-7753

Email: kara@katzgroupla.com


13400 Ventura Blvd

Sherman Oaks, CA 91423










This is not a solicitation if your property is currently listed with another broker. Realtor. DRE# 02062597. DRE# 02062556. Office DRE# 01811831. Designed by ZP Branding & Marketing, Corp. Copyright 2020