According to the California Association of Realtors, the statewide medium home price registered its biggest year-over-year gain in 15 months. What does this mean?
Buyers and Sellers: There is solid interest from prospective buyers, looking to buy a home despite persistently “high” mortgage rates, which are a little over 7% for a 30 year fixed. Also, there is a continued shortage of homes for sale due to sellers, not wanting to sell because of their locked-in existing low mortgage rate. The majority of both Buyers and Sellers are basically on the sidelines waiting for rates to drop. What will help the market is once interest rates begin to moderate in this last fourth quarter then we can begin to see more buyers and sellers get back into buying and selling.
Which Buyers Are Impacted the Most: The higher interest rates impact the typical first time, single buyer that has no all cash ready to purchase a home and must rely on a loan. They find themselves waiting for interest rates to fall, but don’t really need to (there are alternatives!).
Which Sellers Are Impacted the Most: Current homeowners with their record-high equity can purchase since they may not need a loan. They are part of a group of buyers of the all-cash market, where higher mortgage rates have no impact. In August, all cash transactions compromised 27% of the housing market, according to the National Association of Realtors (NAR). If you are part of this group, expect higher selling prices for your home and depending on where you want to move to, you may have purchasing/buying power. You do, however, have to have your home in certain shape, certain price point and be able to wait X number of days. Please let me guide you.
