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Happy Monday! Will the Buffalo Bills win the Super Bowl this year? Will there be peace in Ukraine? I can’t answer those questions but we can talk specifics of Real Estate. There are two important factors driving the Real Estate Market right now: borrowing rates and inventory. While there certainly other factors, rates and inventory are key metrics specific to the Ventura County area that are market drivers right now. the rates have CERTAINLY climbed over the past few months. Rates were under 5% and now they are above 6% now. I just spoke with a local lender and 6.5% is an average rate for a primary home right now. This has slowed down the market and has caused many high priced listings to lower their price. However, inventory is another important factor that keeps home prices up for the sellers. If there are not enough homes for buyers to look at prices can stay on the higher side. Finally, the numbers have shown that the last two years were an extreme seller’s market which has now changed into a cooler seller’s market. What will come next? Probably more of the same…higher rates and lower prices…How much? NO CRYSTAL BALL but I think it will be a slow steady decline without the severe spikes of the recession of fifteen years ago.
Below you will see specific data points and some ideas to consider. These numbers can help you get a sense of the NOW so you can look ahead and find out what MAY be coming next. There is no crystal ball We don’t know what is coming but you can do a few things to help you make decisions: what is the market doing NOW and what are your goals? Please see below for two of the most important factors affecting Real Estate in Ventura County Today.
ONE: If you look at the graph below showing Absorption Rate you will see a spike that corresponds to the average amount of time it would take the homes currently on the market to sell. A higher absorption rate means more of a buyers market. A clear buyers market would have to escalate to 5% or above.
**This below market summary is Camarillo focused, however, it is indicative of all markets in Ventura County right now. If you have a specific city you would like more information on, let me know.
TWO: The Sold to List Ratio shows a severe drop starting after April. This means that on average, real estate is selling for about 97% of the list price value. One more factor that shows a slowing down of the extreme seller’s market.
THREE: Mortgage rates are on a steady climb. If you look back at a year ago they are higher. However, its always important to consider perspective. If you look at this historical mortgage rate graphic you will see that if you go back a few years, current rates are still pretty good. If you go back even further then current rates look amazing. Perspective.
So what do you do now?
As quoted from bankrate.com:
“On Monday, October 03, 2022, the national average 30-year fixed mortgage APR is 7.070%. The average 30-year refinance APR is 7.050%, according to Bankrate’s latest survey of the nation’s largest mortgage lenders.”
Keep your eyes and ears open for any possibility. Well the time could be here to find a great opportunity because you can get good TERMS on your loan. It is crucial for you to stay in touch with your realtor for good off market buys-I have some personal predictions that I can let you in on if you are interested. In addition, with the low inventory you want to build that relationship so your Realtor thinks about you first when they find something on or off market.
Rates are getting higher, for sure, but you should still consider your budget first. While it may frustrate you to pay a high rate, it could still make sense. Do your numbers. This could be a tough time to buy BUT its still an option with some sellers being flexible. It is crucial for you to stay in touch with your realtor for good off market buys AND prepare yourself for a very aggressive offer. In addition, with the low inventory you want to build that relationship so your Realtor thinks about you first when they find something on or off market.
While prices are taking a hit, right now is still a great time to sell. With prices predicted to continue to decline, talk with me to decide if its right for you.
If you liked these stats please reach out and let me know about it! If you have any questions about the Real Estate market or the process of buying or selling a home please contact me. Contact me today if you are ready to buy or sell a home.
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FTBS- Certified First Time Home Buyer Specialist
SRES- Senior Real Estate Specialist