The ever-continuous magic question: “Is now the right time to buy?” Is it?
My response has always stayed the same: “if the time is right for you.” How do you determine that in an ever-changing and evolving market? Many considerations, economics, interest rates and of course price. South County has always been its own niche market; however what we’re seeing now is how neighborhoods, criteria and condition of homes are impacted in the current market.
This third quarter we have seen many changes. Interest rates rise and fall but for the most part have been steady. Buyers, when making the decision to buy need to understand how the interest rate changes can impact their purchasing power. A half a percent could make the difference in qualifying and could be a positive factor.
According to California Association of Realtors Chief Economist Jordan Levine, “Mortgage rates could go up to 7.5% and home prices may first go up rather than down,” but he predicts the bottom is not going to fall out of the market because it continues to improve as the economy stabilizes.
We also are observing multiple offers, homes selling in 10 days or less, and many over list price.
In this market, buyers need to be ready. Loan approval is a must, understanding the loan and its process. Some lenders are offering up-front rate locks, without securing a home while others must have a ratified contract. There are many loan programs and buyers need an expert to know what program will work best for them.
I think most buyers are surprised to find that there are still opportunities to obtain the 5% interest rates, down payment assistance and even closing costs credit. Buyers, be open-minded; not everything will be perfect, working with an expert is more viable today than ever before.
Experts like Fannie Mae note that 2023 began stronger than anticipated but say the strength could waver closer to the end of the year. The demand for affordable housing is greater than the supply, and prices are not likely to drop substantially in the near future (Noted June 2). However, this mid-third quarter we have not seen that waver. Instead, we have seen the opposite.
Not every home is experiencing multiple offers. Why is that? There could be two homes on the same street for sale and one will sell in five days and the other will sit for more than 60 days. Today approximately 60% of pending homes in South County—Gilroy and Morgan Hill—were on the market less than 10 days. Are buyers searching for that perfect, move-in-ready home, or are sellers holding out for their list price or over list price offer? Maybe a little bit of both? Either way it’s working or it’s not. Sellers are receiving that top dollar for that remodeled move-in-ready home.
What does this mean for us? According to the California Association of Realtors: “The residential sector experienced a noteworthy surge in demand for single-family homes and suburban properties. Lifestyle changes prompted many families to seek larger living spaces and green surroundings. As a result, suburban areas saw accelerated growth.”
South County has seen this growth and will continue to do so. More for your money and the quality of life make the perfect combination for families and those seeking this dream. Buyers, be open-minded. The home of your dreams may not be the one on the market for 60 days, but it could be your stepping stone to it.
Michelle Perry is the 2023 President Elect of the Santa Clara County Association of REALTORS.
