Another Boring Week In Real Estate, No Housing Crash In Sight

For months the real estate press has been screaming about an upcoming real estate crash.  Not that the data supported it, but I think to some degree it was desperation to get attention coupled with general anxiety about our economy.

What if it was just .... boring?

I think that's where we are, a normal market with no real drama. For today.

What do I mean?

Well, interest rates inched below 6% last week. That would be a headline or two, but the real estate industry reports rates in such a dishonest way, that they are not yet even reporting the reversal of direction.

Here you see the actual market rate closing the week JUST below 6%, but the rates the real estate industry market uses is the Freddie Mac survey rate. In a previous episode I described how inaccurate and dated its methodology is, but today, let's just look at how that index has consistently trailed the actual rates.

Additionally, inventory continues to drop, now below 2020 and almost the same as 2021, but we are still below all pre-COVID markets by a about 50%

In fact, the market has become so ..... normal.... that the real estate industry news has nothing left but to report good news. Imagine that.

Zillow Research reports the news that more escrows are canceling than the last 2 years, but, in an important concession, notes that they are still below pre-pandemic norms, meaning that buyers are NOT backing out of contracts as often as in a "normal" market.

MSNBC finally reports that interest rates are projected to fall in 2023. So, when rates initially rose from the 2% rate to over 6%, there were out-of-breath reports expecting rates to continue to spin higher. And while the economy may change and that may happen, based on current data, Fannie Mae is projecting that next year rates will drop to 4.3%. This is certainly good news for buyers who are purchasing now and may be able to enjoy the historic benefit of free refinancing if the rates do in fact go down.

And while many "news" posts are merely conjecturing, in this case, MSNBC is correctly reporting on Fannie Mae's official projection. Of course, in an election year, and one as contested as we are currently in, do we believe the quasi-government agency's prediction?
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Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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