AUGUST NEWSLETTER
Dear Friends, Family, and Colleagues,
Interest rates take center stage after hitting levels not seen in over 20 years! California’s median home price exceeded $800,000 in July for the fourth straight month and had its first year-over-year gain in nine months. Continuing inventory shortage has kept prices very steady, despite the rise in interest rates.
Review our Buyers and Sellers ADVICE section to best position yourself in this transitioning market. Please continue sending us topics of interest so we can cover them in future newsletters. Thank you for reading!
Sincerely,
Dennis Adelpour and The Adelpour Group
Interest rates have hit new highs causing many buyers and sellers to move forward cautiously. In addition, we have seeing a shortage of inventory but a recent rise in pricing. In California as a whole, existing, single-family home sales totaled 269,180 in July, down 3.0% from June and down 9% from July 2022. July’s statewide median home price was $832,340, down 0.7% from June and up 0.2% from July 2022. while year-to-date statewide home sales were down 30.3% in July.
Nearly 80 percent of all counties in California experienced a dip in active listing from last year, and 38 of them dropped by double-digits on a year-over-year basis. The market seems to be slowly adjusting to the higher mortgage rates, with buyers taking advantage of any signs of rate decreases.
Many buyers have become very picky of a home's condition and finishes. With the higher costs to purchase, buyers are much less likely to settle for a home that doesn't check all of their boxes. Updated homes are selling the best in this market right now. If you're thinking of selling, consider making updates to your home that are within your budget and go along with your comfort level and time frame. We are seeing that updates to the kitchen and bathrooms provide the highest return on investment. But inexpensive DIY projects can also go a long way: A fresh coat of neutral paint and spruced-up landscaping are low-cost ways to make a great first impression.
Some buyers are having a tough time getting approved for a loan with the rise in interest rates. The likelihood of buyers not being able to perform with a loan during escrow has increased substantially. Proper vetting of a buyer and their finances becomes critical in a market like this. Getting buyers cross qualified with our lender happens every time to ensure no surprises later down the line.
With the limited inventory we are experiencing and decent demand - homes that are priced and marketed correctly are still seeing multiple offers. Homes are definitely selling and some for record prices. We just closed on a property yesterday for a record price! If you need to sell, now is a good time to consider going to market.
Will interest rates continue to climb this year? Will more inventory come out? The real answer is it's almost impossible to predict. Many buyers have been waiting for years now for prices to come down and now they've been met with price appreciation and higher interest rates. Again, you can't time the market so if you need to buy and you can afford it, find the right deal and buy it. Real estate has always gone up over time. ALWAYS! If you're thinking long term, history shows us you'll be fine. With that said, do not purchase a home right now that is over your budget or makes you house poor.
The adjustable-rate mortgages are an option to bring down the rate a bit but exposes you to some risk since you would only have a fixed rate for a short period of time.
There are a lot of properties for sale - but most of them are not on the market. Off-markets take effort to find, but they are out there and have proven to be some of the best opportunities available in this low inventory environment. From the handful of off-markets we've worked on in the last few months, we are noticing many sellers are looking for a smooth transaction and not necessarily the highest price. This is a huge benefit to a buyer. The ability for a buyer to close escrow has become a worry for many sellers, hence the desire for a more "intimate" and controlled transaction such as off-market opportunities.
Check out the recent Redfin article we were featured in:
Build-To-Rent Homes: What You Need to Know About the Future of Single-Family Rentals
Build-to-rent (BTR) homes are ideal for people who want the benefits of community living without the hassle of maintenance, mortgage payments, or HOA dues. In recent years, the movement to create more of these types of homes has been increasing due to higher demand. Because of its rapid growth, many real estate companies and investors are developing BTR properties to capitalize on the craze.
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