Quick market update. Rates are still above 7%. Freddie Mac has the 30 year at 7.24% this week, barely down from 7.32% last week. This time last year it was 6.17%. For every $1M you borrow, that's about $710 more a month for the same house.
And don't count on relief right away. The Fed held rates steady, but a December hike is looking likely. They're widely expected to raise rates at their Dec. 9 meeting if the upcoming data comes in as expected, according to Real Estate News and Redfin.
I'm seeing more and more of my buyers sit out this rate hike, and sellers are holding off because they don't think it's a good time to sell. Confidence is low across the board, and houses can take longer to sell. But it's a divided market. I just sold a house with 10 offers in a bidding war. So it really is house by house. A good house is still hard to find, and when it's in a good neighborhood with good design, layout and pricing, it still sells fast.
The numbers right now
Prices are basically flat
Sales volume is down over 10%, but prices are basically flat for the year. LA County's median house sold for $994,670 in September, about 1% higher than last year (Hoodline). The City of LA is right around $1.03M, almost exactly where it was a year ago. Nothing is crashing. Fewer homes are selling, and sellers are more willing to talk.
If you're buying
You've got leverage. Here's how I'd use it:
- Ask for a seller credit. Use it to buy down your rate, cover your closing costs, or take it as a price reduction. A rate buydown often saves more each month than the same money off the price.
- Shop your loan. Talking to a few lenders can save you a lot.
- Keep your inspections. What they turn up can be negotiated into credits that help cover your closing costs. I'm negotiating buyer credits on just about every home right now. It's case by case and depends on what we find.
If you're selling
Price it right on day one. The homes that start high sit, then end up chasing the market down. I recently had a seller go against my pricing advice, and we sat on the market for months. Now more than ever, you need to price and market it right.
Test the market with a Compass Private Exclusive. Off market sales and testing prices are huge right now.
Buyer demand tool: I can run your address and tell you how many buyers are looking for a home like yours right now. These analytics are incredibly powerful. Gone are the days of launching a house and wondering what will happen. Check your home's buyer demand.
How I'd think about it
If the payment works at today's rate, go shopping. Good houses are still selling fast with multiple offers. But the real opportunities are the ones that got marketed badly: bad photos, overpriced, sitting on the market. That's where the deals are.
When rates do come down, the competition comes right back and prices go up with it. Lock in a good house at a good price now, and think about refinancing later.
I promise I don't bite
I know, I know. I'm a real estate agent. But I'm genuinely happy to just talk the market with you. No pitch, no pressure, no expectations.
Let's Just TalkTalk soon,
Jeremiah
Keep reading
- Does Getting Preapproved With Multiple Lenders Hurt Your Credit?
- You Found the Perfect House. Now What?
- What Is a TIC? A Los Angeles Buyer's Guide
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