At the halfway point in 2019, it’s a good time to revisit Burbank real estate market inventory levels, price appreciation (both up and down) and how interest rates are playing a vital role in affecting both! First, let’s talk what’s available in Burbank: Currently, there are a whole 62 single family homes (SFRs) listed! The lease expensive, a 2BD, 1BA in 900 sq. ft. located on busy victory Blvd. going for $595,000. The most expensive, a 6BD, 5BA in 3,474 sq. ft. going for $1,650,000 (way over priced). More importantly, of those 62 homes listed, just under half (29) start at $1 million! Now let’s talk Burbank condos: Current active inventory is 33 units, with the least expensive being a 1BD, 1BA in a whole 760 sq. ft. listed at $400,000. Most expensive: a 3BD, 3BA unit with only 1,493 sq. ft. listed for $895,000 (again, in my opinion, way high). But like the SFR market, there’s very little “affordable” condo inventory, with more than half the inventory (20) priced above $600,000! Essentially, these very low inventory levels have persisted for the last five years; SFRs ranging from 60-90 homes and condo inventory fluctuating between 25-45 units for sale. Meager supplies spurring high demand competition and sale prices!
And to be clear, the only way Burbank real estate Buyers are able to afford a median home price of $885,000 and a condo median of $560,000 is by utilizing historic low interest rates! This point is clearly illustrated when you look at sales numbers and prices from earlier in the year when rates were at or below 4%. We hit a median high SFR price of $965,000 and $597,000 for condos, then when rates rose, the Buyer pool shrunk, market times increased and the median numbers came down. Same pattern with rates recently going down again – more Buyers could squeeze into qualifying and competition and prices have again risen. Currently, the Federal Reserve Bank is in quite a dilemma: Do the remain independent, data-driven and refrain from or consider raising rates in an effort to keep inflation at bay and maintain a strong yet slowing economy? Or do they bow to pressure from Wall Street and a president that wants rate cuts to keep an historic prolonged “Bull Market” going entering an election year? Time will tell. But suffice it to say, given these historic high prices, seemingly small swings in interest rates can have a big impact on how high prices remain here in Burbank!
What are your thoughts? Please don’t hesitate to contact me to discuss any of the aspects discussed above!
