Single family home listings in 2022 are 17% lower than 2021
Single family closed sales are down 29.8% from 2021
The single family median sales price in October 2022 was $1,165,000 – Up 3.3% in 12 months – and down 9.7% from the peak earlier this year.
Condos and Townhomes: The median sales price in October was $670,000 – compared with $710,000 earlier this year.
Average number of days on the market increased from 19 earlier this year to 35 days in October.
Although there were 83% more Orange County homes for sale in October this year compared with October 2021, current inventory is still historically low.
The real estate market of the past two years was the anomaly – not the rule. Even though home sales have slowed, year over year home prices still average higher than one year previous. Why? 85% of homeowners locked in mortgage rates at 3.75% or less over the past few years – and they have plenty of equity. Most homeowners have low housing costs, and simply do not need to sell. That keeps inventory in check relative to demand. Also, Many homeowners that may like to move to a larger home or new location, are reluctant to trade their 3% loans for 6% loans. This is likely to change as interest rates soften, leading to increasing inventory levels.
Current available housing for sale is about 25% of what it was during the real estate correction of 2008-2011 – as home prices dropped 38 percent. Today, distressed properties in Southern California average 1% of the market, compared with over 30% in 2008. Short-sells are at statistical zero because of significant price appreciation over the past two years.
It appears mortgage rates may have hit a ceiling at 7% because inflation may have topped out. Interest rates traditionally soften in November and December, so we will see where interest rates are in February to gauge the market.
The gap between the 30 year fixed rate mortgage and the government borrowing rate is much wider today than the historical average. If the spread was standard, 30 year fixed mortgage rates would be around 5.75% today. As the economy moves through recession concerns, mortgage rates will likely soften to match historical standards.
The loan program we currently like most is a 30 year loan fixed for the first 7 years. The gap between this 7/1 ARM and the 30 Year Fixed is averaging 1%. This is about .75% better than standard. We highly recommend this loan program because it offers the best combination of safety and savings. Call me for more information if you are considering a home purchase or refinance, and I can share why this loan is the current bargain in today’s market.
Lower mortgage rates are currently forecast for 2024. Lower rates will increase home affordability, and likely mobilize the Millennial Generation – the largest living generation of potential homebuyers. Millennials are currently 25 to 40 years old – prime homebuying years. Demand for homes is expected to increase as mortgage rates decline, and inventory levels rise.
If you are considering a move in 2023, working with an experienced real estate agent is critical in this market to insure you receive the most profit when selling.
I have personally sold over 1,300 homes in Cypress and the surrounding area. That’s experience you can trust. We will provide the right knowledge to insure you receive the highest price when selling. For more information, call me direct at: 800-944-2441, or email me at: Cary@Cary4Homes.com.