Salah Salah is an award-winning Full-Service Neighborhood Realtor and an invested member of the Mountain House Community. Salah prides himself on his knowledge of local real estate trends, and strives to provide the best service for his clientele.
Happy New Year, Mountain House Family! As we review the year’s end, let’s delve into the November/December market update. Reflecting on the past year, the Real Estate market has been quite interesting. Interest rates hit historic highs, and housing inventory stayed historically low, creating a puzzle for sellers and buyers. On a positive note, mortgage interest rates have recently improved and are now among the lowest in the past 3 months. While it’s speculative, experts are optimistic that rates will continue to improve in the first and second quarters of the new year.
We’re still in a “Seller’s Market”. Our inventory has decreased since the last update, with 6 homes for sale in Mountain House compared to 8 in the previous update. The standing inventory is now at 0.46 (Less Than 1 Month), down from precisely one month in the last update. Despite this, many buyers are still searching for homes. However, some homes entering the market with unrealistic expectations are struggling to gain traction. It’s essential to note that this is more of a seller and realtor concern than a market issue.
Navigating this market can be confusing for buyers, sellers, and agents. Contrary to the idea that all homes are swiftly selling above asking prices, the reality is that homes still need to be presented well and priced realistically to attract serious buyers. In a broader economic context, Federal Reserve officials have just announced their decision to leave interest rates unchanged in the final policy decision of 2023. Furthermore, they forecast that borrowing costs will be cut three times in the coming year, indicating a shift as inflation eases.
Looking ahead to the coming year, there’s curiosity about the Real Estate Market we are entering. If you have any questions about this article or our Real Estate market, feel free to reach out to me anytime. Remember, choosing a Realtor with experience in your local market puts you in an excellent position to navigate these evolving market conditions. Wishing you a smooth transition into the New Year!
Why Does Inventory Continue To Stay Low?
We are experiencing a rippling effect from the historic low-interest rates during the past few years. Homeowners who purchased or refinanced during that time are less motivated to sell their current or primary home because of the low-interest rates they have. Many of the homes we see hit the market are secondary homes (rentals) or “life events” that are occurring i.e., an unfortunate death, separation/ divorce, or work relocation. The interesting part is that when you run the numbers, selling, and buying currently do make sense in many situations. Even though the interest rates are higher than the historic lows.
Home Values
Our Mountain House home values are continuing to rise. The best and most accurate way to get your current home value is to talk with a local agent. Most homeowners are in utter shock at their current home values! In our ever-evolving digital age, most homeowners utilize websites that have algorithms in place to obtain their current home value. Those sites cannot even remotely keep up with this current market and are highly inaccurate in most to all cases. Reaching out to a local and experienced Realtor is going to be the best approach for an accurate home value.
What Is a Buyer’s Market?
A buyer’s market refers to a situation in which changes to the underlying economic conditions that shape “supply and demand.” It means that purchasers have an advantage over sellers in price negotiations. A buyers market occurs when there is six (6) or more months of Inventory supply available.
What is a Neutral Market? A Neutral market is when we have three to six (3-6) months of inventory supply.
What Is a Seller’s Market? A seller’s market is a market condition characterized by a shortage of goods available for sale, resulting in pricing power for the seller. A Seller’s Market is a term commonly applied to the property market when low supply meets high demand. A sellers market equals less than three (3) months of inventory supply.
What Does Months Of Inventory Mean?
Months of inventory takes into account the number of homes for sale on the market with recently sold homes and reflects the number of months it would take to sell all homes currently on the market. You can calculate months of inventory by dividing the total number of homes for sale over the number of homes sold in one month. When months of inventory are low, it’s a fast-paced market dominated by buyers and few sellers. When months of inventory are high, there are generally more homes on the market (dominated by sellers) with fewer buyers or sales.
