The interest rate hit 6.00% as of the time of recording this week. This has played a major role in cooling the housing market and it will slow further over the summer. Are we officially in a buyer’s market? Learn more with Jack Ma!
Welcome back. As always, if you find this video helpful please subscribe to my YouTube channel or like my Facebook page depending on where you see it. If you know anyone that could benefit from this information, please share it with them as well! The real estate market is cyclical and it generally follow the same cycle year in and year out. Of course, when crazy things like COVID happened, it knock the market out of their regular cycle but generally it is pretty consistent. Year over year, we have seen the number of pending sales which is an indication of buyer’s demand bottom out in December. Sales starts to pick up steam and peak out in May.
It’s not quite what we are looking at this year. The pending sales peaked out in March this years and been on the decline since. As matter of fact, the # of home sold in May has hit a 2 year low. The number of sales is down almost 30% compare to May of last year. And if you recall, this decline of sales coincide with interest rate trending upward. Interest rate hit 4% in March and surpassed 5% in April and will continue to go up. It is expected the interest rate to hit 7% by end of the year.
With the continue rising interest rate and the busiest season already behind us, we can logically expect the market to continue to slow. We have already seen marketing time, the time it takes a house to sell from increase from less than 10 days to 14 Days.
What makes the situation more interesting is that we are seeing more listings coming onto the market. The number of homes that went on the market in May was almost double to that of January. So we are seeing more people wanting to sell, less people wanting to buy so home inventory has been increasing. Buyer now has more options. With the interest rate rising, buying a house is more expensive so buyers are more selective. Couple that with a rising inventory, its starting to take longer for a house to sell.
So we are in a buyer’s market right? Not so fast. Our market is no doubt shifting away from a sizzling hot seller’s market and towards a buyer’s market. Bear in mind, changes doesn’t happen over night. It’s a transition. We are still in a slight seller’s market.
Properties that are priced well still gets a few multiple offers and selling quickly. Buyers on the market now are motivated and wants to locked in a lower interest rate. Properties that are not priced well will sit. As matter of fact, around 26% of homes on the market has gone through at least 1 price reduction before getting they are sold, which is unheard of in the last two years. For Buyers, if you are still in the market and see a property that works well for you and is well priced, don’t assume it will sit or you can low ball the offer. It is not a buyers market. If you want to negotiate or get a good deal, look for properties that have been on the market for a while without an offer.
Fo Sellers, pricing your property right is more important than ever. Bear in mind that the last sold comparable may have been under contract months ago and the demand on the market is way different. If you want the best possible outcome on your sale, price the property slightly below the fair market offer and chances are you will still get multiple offers and push the price slightly higher than market value,
Hope this give you some idea on the market. Should you have any questions, please let me know. I can be reach at 909-610-5188. Also please check out my website at www.jackmarealestate.com.
