With record low mortgage rates, there is almost too much demand. (Not to mention: Buyers are consumed with how their current home doesn't have the space or features they want in a pandemic reality.) It is like a pot of spaghetti that is boiling over. A quick fix would be to turn down the temperature. That is not that easy in housing. The only way to turn down the heat is for rates to rise. Buyers may be rooting for an easier market with less competition, fewer competing offers, and a gentler rise in values, but that would come at the expense of higher rates and higher monthly payments.
It is the very thing that buyers are eager to take advantage of that is causing all their frustrations, record low mortgage rates below 3%. It seems that everyone wants to cash in on these incredible savings at the same time. At lower rates, homes become a lot more affordable, even for Southern California’s high dollar value housing stock. It improves a buyer’s purchasing power as well, allowing a family on a budget to afford a lot more home.
Because of these low rates, demand is off the charts and everything that comes on the market is gobbled up almost immediately. Today’s demand (a snapshot of the prior 30-days of pending sales activity) is at 2,055 pending sales compared to 1,702 last year, 21% higher.
The current active inventory (the number of available homes to purchase) is at 2,627 compared to 4,023 last year. There were 53% more homes available to purchase only one year ago. With rock solid demand and an exceptionally low supply, the market is unbelievably hot and lines up heavily in the seller’s favor. The Expected Market Time (the number of months to sell all Orange County listings at the current buying pace) is at 38 days. Last year it was at 71 days, and in November 2018 it was at 122 days.
While today’s housing market may be boiling over on the backs of record low mortgage rates, buyers should keep the pedal to the metal and not give up. Home values are on the rise and mortgage rates are slated to increase to the mid-3’s by year’s end. Waiting is quite simply not the answer. The same goes for sellers. Waiting until the second half of the year when inventory increases (meaning your property has more competition) and interest rates increase (meaning buyers have less purchasing power) could result in your home taking longer to sell and not selling for as much as you would like. If you are considering selling your home or someone you know is thinking of selling their home but want to wait until the pandemic is over...DON'T WAIT! Striking while the iron is hot is key to your success; just as working with the right real estate team is paramount to selling it quickly and for top dollar. That is where The Swan Team comes in!
Contact us now at 949-444-1601 and get the best team in the business working for you!