Mortgage Rates Continue Their Climb, But No Crash or Housing Crisis In Sight

Mortgage rates continue their march up, hitting the highest rates since 2009 at 5.64$% for 30-year fixed rates.

And, the housing market .... continues its record pace unabated.

The news about a pending recession and horrific inflation in the US has sparked a nonstop chorus of calls for a real estate crash, and yet the market .... continues its record pace unabated.

Inventory is at record lows AND DECLINING! The higher rates will prevent some sellers from selling as they would be trading their current home and mortgage at 2-3% rates for a higher mortgage, making that trade-up harder.

New Listings are coming to the market slower than each of the last two years of record lows.

Under Contract is about the same as last year's record number....how can that be?

Sold numbers below last year's record year, but still above prior years.

So, the numbers say the market is still on a hot, just below record, pace.

Yet, the real estate industry news continues to look for bad news and is on the constant lookout for a housing crisis.

For example, Fortune Magazine's lead housing article screamed "We’re in a historically overvalued housing market, and these cities could see home prices drop 10%." All these cities? And 10% sounds so bad. What does that mean?

Well, when you dig into the report the article is based on, the author concludes that he "doesn't foresee a national some price correction." Now, while some markets will see a 10% decline, others will see a 10% increase, and he is projecting an average overall increase of 5%. Hmmm, that does not sound too bad.

Anxious to get media attention, Redfin publishes a report that "Americans are Buying Smaller Homes as Prices Skyrocket." Now, neither of those two facts are incorrect, Americans ARE buying smaller homes AND prices are skyrocketing, but are those two related? Are they significant?

So, let's break it down. How much smaller are the homes being bought today. Wells, the average in the past 4 weeks declined from a record of 1,791 sq ft in 2020 to 1,751 sq ft last year to 1,720 sq ft today. But that's HIGHER than the 1,710 in 2019. So, is the drop of 70 sq ft over 2 years significant? Or the rise of 10 sq ft since 2019? My head hurts looking at the details. But when we step back, I think you can conclude 2 things: Overall, the change of under 100 sq ft is not significant, but, more importantly, the COVID-era trend towards larger homes to accommodate home offices and home gyms is perhaps slowing slightly. That's all.

So, again, the news needs to be reviewed very carefully. But what is the conclusion?

If you are looking to sell, this is still the best market to sell in during my career, and you should get a great price and the flexibility to make the sale work for you. The best thing you can do to get top dollar is to remove anything you can and get rid of what can be thrown out, donated, or stored. Clean and fix what can be done by a handyman to create a great first impression, but otherwise save your money.

If you are buying, you should look for escrow fallouts, be patient when buying, and make sure to get the loan rate locked in that makes sense for your transaction.

How can I help you? Call, text, or email me.
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I host two FREE Real Estate Zoom calls every week:

Real Estate Flipping / Investing Focused:
Tuesday 3PM Pacific Time
Link: https://www.eventbrite.com/e/so-cal-real-estate-investment-meetup-tickets-80900334077
Topic: So Cal Real Estate Investing Meetup
This group is for Landlords, Fix and Flip, Traditional and Non-traditional Real Estate Investing, as well as all Real Estate Service Providers (Agents, Title, Contractors, and more.),

Probate Focused:
Thursday 4PM Pacific Time
Link: https://www.eventbrite.com/e/how-to-get-your-first-sale-in-probate-real-estate-tickets-67396261031
Topic: How to Get a Sale NOW in Probate Real Estate

There are lots of programs that promise to help you sell a LOT of homes, but how do you get your 1st sale? As the baby boomer ages, the number of homes being passed on to heirs continues to increase. I'll share with you 11 different ways that I have generated a listing or buyer sale that do not cost you any money.