|February 1, 2018||No Comments|
It’s a new year, we’ve got tax reform, we’ve had devastating fires and the economy is actually pretty great right now. So what does that me for you if you’re thinking of buying or selling a home? First of all, it means it’s time for the 2018 Real Estate Market Update!
The stock market is breaking records, unemployment is low and inflation is near its target. Mortgage rates are just over 4%. Housing prices in most markets are back to where they were pre-crash. All these factors together mean housing is 30-40% more affordable than it was 10 years ago!
Tax reform will have a minimal impact on most of us buying or selling houses – but we all have unique situations, so ask your CPA how it will affect you.
The biggest issue we have now is a lack of houses! Why? 10 years ago people stayed in their homes an average of 5-6 years, now it’s closer to 11-12 years. Here in our market – the Conejo Valley, Simi, and Moorpark – there’s almost nowhere to build, so there are very few new builds. The fires wiped out a bunch of homes, adding to the shortage. In our market, there are only 469 houses on the market and there’s only a 1.6 month supply of inventory that’s 11% less than a year ago. We have lots of clients looking for houses, but it’s taking time to find what they want.
What happens when there’s a lack of inventory? Prices will keep going up.
The median price of a home sold in our market a year ago was $609k last month it was $647k, that’s up 6.2 %. The fed raised rates 3x last year and rates have slowly ticked upward. They intend to raise rates this year – so rates will likely continue to slowly climb.
As prices and rates go up, affordability goes down. And no, we’re not expecting a crash because the economic indicators are too good. Will there ever be a correction? Of course, there always is, but the next correction – whenever that is – won’t resemble the crash 10 years ago unless there’s some major US or world disaster.
If you’re thinking of buying – when is the time? NOW! It’s not gonna be easier a year from now! Rents are also going up – so stop paying your landlord’s mortgage and pay your own!
For sellers – there are no homes on the market! They are selling like hotcakes. The 3 homes we’ve sold in the last month all sold in about a week with multiple offers. If you wait till spring – like everyone thinks is the best time to sell – there are more homes on the market, so you have more competition and rates will likely be higher, so there’s less affordability. NOW is the time to sell!
Bottom line – if you’re thinking of buying or selling – stop waiting! Get on it! Call us! Cause if there’s one thing we know, it’s how to market a home.