September Housing Market Update
Staying up to date on the current real estate market has become more difficult as the year goes on. Even the major institutions have changed their projections for 2023.
Below is a chart of the changes from their original forecasts to the current forecasts:
Remember that this is on a national scale. Let's dive into what our September update looks like for Orange County.
Everyone (a lot of buyers) has been waiting for prices to come crashing down. For those of us that are living in their real estate market, we have been saying that we don't see it happening.
Let's look at the facts.
Inventory is still low. This chart shows the number of active listings at 3,265 going into September. We're above the low of last December, but we've got some time to go before we get into the Winter market.
Inventory has slightly increased over the last few months. We will see if that trend continues through the Winter. Typically we see inventory start to decline this time of year.
Prices are breaking records. We have officially seen prices hit new all time highs. The median price of sold homes in August was $1,092,500.
This is the new highest price point we've seen, even higher than the peak of the market in 2022 which was at $1,060,000. Keep in mind that interest rates were in the mid-4% range at that time.
What this shows me is that there is a lot of room for prices to increase as interest rates drop. The chart below shows what interest rates have done since 2020. We've seen rates and prices increasing step by step.
If you read our previous market update, we mentioned that it's not a matter of if interest rates drop, it's when. The big question now is: Do prices remain this high until interest rates drop?
If we were to see prices stay anywhere near where they are now when rates drop, we will see prices increase.
Where is the opportunity? Over the last 12 months, the people who took advantage of last winter are in a good situation. It's likely that we will see a similar situation this winter. Sellers need to make more concessions to sell their home in the Winter.
Buyers can take advantage of interest rate buy-down programs to increase their affordability.
Sellers, this is the time to be aggressive in getting your home on the market. Making sure that you're doing everything you need to to go to the market. Anyone who is looking to buy and sell, it may be something to look at doing this winter.
PS - If you’re considering making a move in the next year or two, we should start a strategy session well ahead of time. Click Here to set up your strategy session.