I’m Nathan Derry, your trusted Realtor for Mid City, 90019. As we continue through the year, it’s important to keep an eye on the shifting dynamics of our local real estate market. August 2024 has provided us with some interesting insights that reflect a possible cooling down in the Mid City area. Let's break down the numbers and explore what they mean for both buyers and sellers.

Absorption Rate: 17%

One of the most telling metrics in real estate is the absorption rate, which indicates how quickly homes are selling compared to the total number of active listings. For August 2024, Mid City had an absorption rate of 17%, meaning only 17% of available homes were sold during the month. A rate this low often points to a market with more inventory than demand, making it more of a buyer’s market.

Key Market Statistics

Here’s a closer look at the numbers shaping the Mid City market for August:

• Active Listings: There were 57 active listings throughout the month, providing buyers with a large selection of homes to choose from.

• Homes Sold: Only 10 homes were sold, suggesting that sellers are facing more competition to attract buyers.

• Average Sales Price: The average sales price for Mid City homes in August was $1,710,000, which reflects a premium market even with the slower sales pace.

• Days on Market (DOM): Homes that did sell were on the market for an average of 23 days, indicating that well-priced homes are still moving relatively quickly.

Why Might the Housing Market Be Saturated in Mid City?

Several factors could explain why the housing market in Mid City seems to be experiencing saturation:

1. Increased Inventory: With 57 active listings, there may simply be too many homes on the market for the current demand. When inventory outpaces demand, homes take longer to sell, and sellers may need to adjust their pricing expectations to remain competitive.

2. Buyer Hesitation: High-interest rates or concerns about economic conditions can cause buyers to hesitate, even in desirable neighborhoods. If buyers perceive uncertainty in the broader market, they may be more cautious about making a purchase, contributing to a slower pace of sales.

3. Seasonal Factors: August can sometimes be a slower month for real estate as families settle in for the school year and summer vacations wind down. This temporary lull could be part of the reason for the reduced activity.

4. Price Sensitivity: With an average sales price of $1,710,000, Mid City is in the higher price range, which may narrow the pool of potential buyers. Some buyers might be waiting for prices to cool down before making a move.

For sellers, this environment means pricing strategically is more important than ever. Homes that are priced too high may sit on the market for longer, while competitively priced homes can still attract offers quickly, as the 23-day average DOM suggests.

New NAR Law Regarding Commission: What It Means for the Real Estate Market

Another major factor impacting the 2024 real estate landscape is the recent change in the National Association of Realtors (NAR) law regarding commission transparency. This law is set to bring a new level of openness to real estate transactions, but it also introduces some significant changes that buyers, sellers, and Realtors should be aware of.

1. Commission Transparency: The new law requires that both buyers and sellers be informed about agent commissions upfront. This move aims to bring clarity to an area of real estate that has historically been less transparent. Buyers will now have a clearer understanding of how much their agent is being compensated.

2. Shift in Commission Responsibility: Traditionally, sellers have covered both the listing agent and buyer’s agent commissions. However, with this new rule, buyers may now be responsible for their agent’s commission in certain situations, depending on how the local market adapts. This change could affect how buyers approach their budgets and negotiations.

How This Might Impact the Market:

• For Buyers: Buyers may become more selective when choosing an agent, given that they will likely be paying some or all of their agent’s commission. This could also impact how aggressively they negotiate on price.
• For Sellers: Sellers may need to rethink their pricing strategies if they are no longer covering the buyer’s agent commission. This shift could result in more creative negotiation tactics and pricing models.
• For Realtors: Realtors will need to be even more transparent about commission structures and their value proposition. The ability to clearly explain these costs and provide excellent service will be key to thriving in this new environment.

Why Work with a Licensed Realtor?

In today’s rapidly changing market, having the right guidance is essential. As a licensed Realtor, I am committed to staying on top of all the latest trends, laws, and market dynamics so that you can make informed decisions.

• Expert Market Knowledge: I understand the nuances of Mid City and can provide insights that help you navigate a more saturated market.

• Clear Commission Guidance: With the new NAR rules, you can count on me to provide full transparency and help you understand all the costs associated with your transaction.

• Competitive Strategy: In a market with an absorption rate of 17%, pricing and presentation are crucial. I’ll work with you to ensure your home stands out, or if you're buying, to secure the best possible deal.

The August 2024 market in Mid City, 90019, reflects a shift toward a buyer’s market, with increased inventory and slower sales. While homes are still selling for strong prices, sellers need to be mindful of the competitive landscape. On top of that, the new NAR commission law adds another layer of complexity to real estate transactions. If you’re thinking about buying or selling, now is the time to work with an experienced, licensed Realtor who can help you navigate these changes effectively.

Feel free to reach out to discuss your real estate goals and how I can assist you.

All the best,
Nathan Derry

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

👨🏽‍💻 itsnathanderry.com

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