When making buying or selling decisions of probably the biggest financial decision in your life, right now, with some media reports of impending real estate doom and disaster, it is Most important to know what professional market forecasts have to say. Important questions you have now are: Is it a good time to buy? Is it a good time to sell? Will the real estate market continue to go “Down”? Should I wait to buy or sell?
The Initial 2023 Forecast: The 2023 housing market forecast from the California Association of Realtors (C.A.R.) just released last week. This report, with the attached 2023 California Housing Forecast Image, says the following for the state of California: Existing single-family home sales are expected to decline by 7.2% (from the 2022 projected pace of 359,220), median home prices are estimated to decline 8.8% and the 30-year, fixed mortgage rate will be at 6.6% (up from 5.2% in 2022, 3.0% in 2021) but 6.6% is still low by historical standards (look at attached “Rates Still Low”). The reporting organization C.A.R. has been in the real estate news and information for more than 110 years, one of the largest trade organizations in the United States headquartered in Los Angeles.
What You May Be Worried About: As sales slowdown because of rising interest rates, some homeowners are concerned about the potential drop of median home prices. Median is just that, the middle point prices of all sold homes that is, some prices will increase, some prices will decrease, and some will stay the same. Here in the San Francisco Bay Area, there are many variations in the median sold home price, even variations within the same city! Data available shows that some counties this late in the year show a slight uptick in selling prices while other counties have a slight downtick in selling prices. In any event, historically the San Francisco Bay Area has shown sold prices continue to go up, decade after decade. So, if you plan on living in the home for more than 2 years, data shows median sales price should not be a concern.
If You Are a Buyer: If you are in a position to purchase now but using a bank loan to buy, you will be impacted because a higher rate means your purchase power will now be lower than, for example, back in February of this year. However, you have less competition from other buyers and can use your buyer contingencies that mostly went away the past 2 years and offer less than asking price, in most instances.
If You Are a Home Seller: Your home should be show ready with a listed price that reflects what has sold in the past weeks, since home buyers and their real estate agents should be up to date on what houses are selling for. Given that, if someone falls in love with your house, for whatever good reasons, it may still sell with multiple offers! For example, in the past 60 days, 475 single family homes and condos have sold in San Mateo County and 1,058 have sold in Santa Clara County. Yes, people are still buying and selling homes! Also remember your next home can be bought at a lower price, less competition.
Very Important to Do Now: It is of MOST importance to have a qualified REALTOR to guide you with what the market is offering, where the home selling prices are going, what to look for in a property to purchase and what to do to get your home ready for sale. As forecasts and updates may change, please continue to be in contact with me either in person or through this blog as I will continue to update all interested in real estate.
(the C.A.R. 2023 housing forecast can be found at: https://www.car.org/aboutus/mediacenter/newsreleases/2022releases/2023housingforecast )
