My name is David Feldberg and I’m a homeowner and and real estate broker of 20 years; and I, just like everyone else, like to know “what did that home go for”? It’s almost a sport here in Orange County seeing how much your home can appreciate in relatively short period of time.
But as I said I have been a homeowner AND real estate broker for 20 years so while I’ve seen many years with double digit appreciation I have also seen a number of years where it stunk to be a homeowner (some more than others).
Whatever the future holds I don’t know (although I have my educated guess) the market is currently shifting from a red hot sellers market to one that is a bit more modest in temperature. Supply is increasing and demand is waning. Let me be clear I’m not saying the sky is falling and the bottom is about to fall out of the real estate market but we are overdue for some balance to return to the housing market. So if the market is shifting and you wanted to get 4 questions answered in this market here is what I think you should be asking.
Is my Approval Still Good?
If you received an approval in March or earlier you should definitely check with your lender to make sure you are still approved up to the same price with a similar payment. Mortgage rates have risen by almost 2% since March so your payment may have changed substantially. If the payment increase is too much you can either drop your approval price OR explore a 5-10 year ARM. The rates here are substantially lower.
How is Supply Trending?
Basic economics fundamentals supply and demand have really been fueling this market the last 18 months. Prior to three months ago the demand for homes (fueled by low interest rates and people needing extra space at home) was through the roof. The supply (number of homes for sale) was at a 40 year low. This is the area where we are seeing most of the evidence of a shift in the housing market. Over the last 3 months rates have increased dramatically thus slowing demand and homes are not selling as quickly at higher prices thus supply is increasing. Should either the demand kick back up OR supply tighten again expect prices to stabilize if not reverse directions pretty quickly.
Should I Buy Now or Wait?
This is the million dollar question these days and I probably get asked it twice a day. I have a few quotes that come to mind here. First is my father in-law who told me that everyone is a payment buyer. They don’t care about the price just the monthly payment. There is definitely some truth to this statement. Over the last 24 months prices have really exploded but demand was still strong, why you ask, low payments. The other is a quote from a fellow agent from about a week ago. She was exhausted and she said my buyers think its 2008 and my sellers think its 2021 and they are both wrong! Again a lot of truth in there. Gone are the days of 30-40 offers in a weekend on a single listing with prices that make you scratch your head BUT this market is not in a free fall nor will it be anytime soon! So should I buy now or wait, I don’t know that you are going to see prices plummet (especially with inflation rearing its head) so as my father in law says if the payment works, then its the right time to buy.
Ps. There was an interesting article in Forbes that I read a few days ago that talks about some of this as well.
Should I Wait to Sell My Home?
Well that’s a loaded question to ask a real estate agent if I have ever heard one. What real estate agent is going to say wait? Its their job to say sell now! So how do you know if you should wait or list now. For me there is a lot to consider if I want to sell my house and buy a new one. My property taxes are most likely going to go up significantly, my payment will probably go up, moving expenses, etc. On the upside I might get a house that fits my lifestyle better, or is in that neighborhood I really want to be in, or maybe it has that extra bedroom for my home office which seems like its going to be a permanent thing now. Whatever your choice there are pros and cons with it and what my advice to you would be if you are going to sell, what’s the reason? Because no one has a crystal ball and I can show you talking heads with impressive credentials that will say the housing market is going up and others to say the housing market is going down. So in my opinion don’t try to time the market just live your life and when the reason is significant enough to move (and sell) you will.
I really enjoy talking housing and economic data and with my clients, friends and family. If you ever have any questions about buying or selling your home in Orange County contact me today.