As far as anyone can tell, home prices should keep declining. But we shouldn’t see a major drop. The market is trying to figure out what to do with high interest rates. In cities like La Mirada, and most of Southern California we still have low inventory so that is also a big part of buying a home that comes into play. Once we work those factors out, we will see where the market drops. A few years ago we had 4% rates; now we are looking at 7.25%. So if La Mirada prices are averaging about $950,000. And if you put 20% down, your loan amount would be $760,000. With higher rates, the payment would be an additional $1,500 a month. That is a major factor.
Buyers want to own a home, but is now the best time for them to buy? Here are their questions.
Are rates going to go down so it is better for them to wait?
What if interest rates go up? They should have bought.
Should they get an adjustable rate so the starting rate is lower than a fixed rate?
What do they qualify for now?
If I buy now, how long will it be before rates go down so I can refi into a lower rate?
Will the homeowner of the home they want to acquire buy down the rate or help us with closing costs so we can buy down the rate?
With all these questions, their answer is: Let’s wait. Last month, nationwide, more real estate transactions were canceled than ever before.
So what do homeowners do to sell their home?
As a seller, you need two things. 1. An experienced agent who knows how to negotiate for you. 2. You need to have an agent who can help you price your home to sell. You need to be close to a market price so you can sell in a reasonable time. Hopefully you have picked an agent that can help you with that. If you don’t, you will have to lower your price, lower than what you would have sold for if you priced it right. That is because if the house is on the market for a long time, buyers will only make lower offers because they will think there is a problem with the house. So pricing it right is very important now. In La Mirada, 40% of sellers last year had to lower their price. I wonder how much of that money those sellers could have put in their pocket. And remember, you also need an experienced agent who can negotiate for you. A buyer will ask for everything now, and you have to keep what they want within a realistic transaction.
If you have any questions, give me a call, or let’s sit down for 30 minutes and talk about your situation.
Talk to Ty