Having worked as a residential real estate broker for the last 25 years here in Chatsworth, I have lived through two significant buyers' markets as well as two hyper-inflated sellers' markets.

Could we be coming out of the current down cycle now?

I've titled my blog, a "Cautionary Seller's Market" for two reasons: 1. Inventory is down significantly which can signal the start of a seller's market. 2. "Cautionary" because I believe buyer's have learned from the last seller's market that it does not behoove them to make offers on properties that will not appraise. So what constitutes either a "Buyer's Market" or a "Seller's Market?"

Either one is predicated on the amount of inventory and how fast it is selling.  In a neutral market we will have six months' worth of inventory. We calculate that by taking the number of active listings and divide it by the number of properties that went under contract in the last month. That number will tell us that if no new properties came on the market, then in a "neutral market" it would take six months to sell off the current balance of inventory.

Once that number gets above six, we consider it a Buyer's market because the buyers have more inventory to choose from. They usually become more particular in their choices then and want only the best houses at the best prices. Conversely, if the number of months of inventory drops below six, then we start moving toward a seller's market. 

Currently, there are only 65 single family residences for sale in Chatsworth. Normally we will have twice that number. Since 43 homeowners accepted offers in the last 30 days, we can quickly calculate that we only have one and a half month's worth of inventory. Now traditionally, that would set us off onto a real seller's market with overbids and prices going WAY up. I believe that sanity will prevail in this "Cautionary Seller's Market" because of what we have been through in the past five years nationwide.

I've coined a term I called a TRINSPIRATION™ & it's a three-word phrase of encouragement or inspiration. 

For Chatsworth sellers, I say, "Change Your Outlook," because the market is changing. 

For buyers in Chatsworth my TRINSPIRATION™ phrase is: "Prepare to Win" because I can show you how to compete effectively in a seller's market.

The author can be reached at 818-882-5735.