The Great Adjustment Of Housing Enthusiasm

Rising rates are having their effect on the resale housing market. Orange County home resales dropped almost 60% from October 2021, and significantly lower than September 2022. Gary Keller of Keller Williams referred to the national sales drop as the second worst behind only the Great Depression in the speed of the drop.

Keller pointed out that the bright lights in this tunnel are the low unemployment figures, the high homeowner equity, cash on hand for the consumer and still relatively low days on market for home sellers (indicating a still strong buyer demand for the inventory on hand). 

The good and bad of this involves the optimism the Federal Reserve Bank has for the economy and their confidence that we can take another rate hike to cool inflation. The housing result is a continued extension of days to sell, which can begin to push us into a buyers’ market when home prices will typically respond with reductions. 

We are in the time when current and hyper-accurate pricing will be key to home sales. Testing the Market pricing has resulted in severely lower showing activity that drops off quickly compared to well-priced, well-prepared homes. Anticipation of another significant interest rate hike gives many of us who have been through pricing cycles the feeling that today’s prices are lower than 6 months ago, but probably higher than 6 months from now. Preparing homes for the market, knowing creative options for buyer financing, strong negotiating skills have never been more important for a Realtor.

Please give us a call at Premier Funding Network to answer any of your mortgage questions, 714-283-9900.