LA home brokers mull Fed’s pledge for steady rates ahead

L.A. real estate professionals reported mixed opinions to the Federal Reserve Bank statement on Jan. 31 that the government’s interest rates would stay between 5.25 and 5.5 percent.

For some agents, the announcement brought relief that the market would hold steady; others see an uptick in transactions. Douglas Elliman’s Stephen Kotler said that no change is better than the skyrocketing rates of 2023. 

“It’s actually good for agents,” Kotler explained. “It feels much better that we’re not on a roller coaster.” Kotler is CEO of brokerage for the Western Region at Douglas Elliman.

The Fed announcement was a welcome change from the 2023 market, added Shelton Wilder, founder of Shelton Wilder Group Christie’s International Real Estate in West L.A. 

“Last year felt like quicksand. But this year we’re having huge turnouts and multiple offers on homes,” she said. “It has been a long time since we’ve had a 3 percent rate. People have accepted rates more. It’s a more active market.”

Jennifer Lind, Western Regional president of Coldwell Banker Realty, said that mortgage rates would be just one part of  L.A.’s complex market — plenty of other factors influence home sales.

“We’ve got an affordability problem and an inventory problem — interest rates are just one part of it,” Lind said. “The stock market has been great. For  a lot of our clients, stock prices might have a lot more impact than interest rates.”

For Stephen Shapiro, co-founder of Westside Estate Agency in Beverly Hills, the announcement was a proverbial nothing burger. 

“It might affect the stock market, not the real estate market,” Shapiro said. “It won’t encourage someone to buy or not to buy a home. The difficulty is finding a house (buyers) like at a price they like.”

For mortgage lender Jason Hecht of Guaranteed Rate, the past year was the slowest time in his  almost 30-year career. He forecast that the market is on the verge of opening up. 

“I’m bullish on where rates will be headed in the next quarter,” Hecht said. “The average 30-year fixed rate loan is just above 6.5, according to [marketplace platform] Optimal Blue. I’m pretty bullish on the average 30-year fixed-rate loan dropping by half a percent by this summer.”

The Fed announcement should have no effect on apartment rentals, said Taylor Avakian, founder of  Los Angeles-based The Group CRE at Lyon Stahl Investment Real Estate. But the steady-state of lending rates will prove frustrating for people who trade residential buildings. 

“A lot of people were banking on rates coming down; they had old loans and they were doing capital calls,” Avakian said. “They were kicking the can down the road. Now that a cut won’t be happening any time soon, you’re going to see a lot more sellers — there’s going to be a lot more transactions in the next quarter.”

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