August Market Update: It's Not What You are Expecting
If you only looked at news headlines, you would probably be thinking that this year has been bad for home values...
... and if you felt that way, you would be feeling like most people do right now.
You'd also be wrong. It has been an interesting market since 2020, as we all know. Over the last 12 months, we saw the end of the most competitive market anyone had ever seen. Then we moved into a market with (relatively) higher interest rates.
While people were calling for a housing market crash bigger than 2008, what actually happened was different.
Here is a summary of what we've seen happen over the last year, since the peak of the market.
Peak of the market, the median price home that sold was $1,060,000.
Interest rates went from 3.5% to 6.5% in what felt like, overnight.
Over the next six months we saw a correction of prices, down to a new median in December 2022 of $920,000. A 13% drop in home values.
Compare that to the 2008 housing market crash, home values went down 35%-50%.
Now we're halfway through 2023 and we've seen prices completely rebound. The last stats to be released were for July and showed a median sale price of $1,052,250. Almost back to the peak pricing, even with the changes we've seen in the market.
Here is what we're expecting over the next 12 months.
1. Interest rates are going to come down, which will bring a ton more buyers back into the market.
2. There are no signs of inventory dramatically increasing.
3. Low supply and an increased demand will speed up price increases.
How do you take advantage of this market? A lot of people are getting in the market now, locking in their price. Knowing that they'll likely be able to refinance when rates drop.
How do you stay in the market? Here is my advice.
Set up your saved search on SoCalHomesForSale.com
Start watching properties that you 'kind-of' like and hit the ❤️ or Favorite button. You'll get updates when there are price drops or when it sells. This will keep you informed on what is happening in the market you're looking in.
If you want a more in depth answer, you should book a Strategy Session with our local experts. We will cover what our clients are doing to take advantage of the market.
Regardless if you're in the market to move or not, it's important to understand what's going on in the market.