Homes of Silicon Valley welcomes you back to our blog as we reveal some national market insights from Realtor.com’s Chief Economist, Danielle Hale. While the housing industry is no doubt experiencing a shift, the 4 themes outlined below are a great foundation for summarizing what is occurring while accounting for micromarket changes that impact your own local considerations.
#1: Inventory is improving – but not by enough.
The Realtor.com June Housing Trends Report indicates that “Housing inventory has made the biggest about-face ever in a one-year period of time, rising 18.7% over this time last year,” says Hale. However, the typical home spent 4 days less on the market than this time last year, and 27 fewer days on the market than summer 2017-2019. Thus, supply is better but demand remains strong.
#2: Price reductions are becoming more common – with roughly 1 in 7 homes experiencing a cut.
The word ‘price cut’ tends to evoke immediate fear – but let’s focus on two things. First of all, price cuts are not a sign of a bursting bubble; they are indicators that home prices are rising more slowly and list prices often find themselves in the middle of this shift. In addition, the quantity of price cuts occurring still lags pre-pandemic levels (we all kind of forgot what the world looked like, right?!). “In short, the national market is resetting and the local area where you’re trying to buy may be on the leading or lagging edge of these trends,” says Hale.
*Bonus Info: See the 10 cities seeing the most price cuts here (hint: Boise tops the list and Sacramento is the only city in California that made the cut.)
#3: Local conditions matter most.
Sereno has long been focused on the fact that real estate is hyperlocal – and your agent’s knowledge should be too! Hale asserts that “The local area where you’re trying to buy could be more or less buyer-friendly than the national data indicates.” Thus, the only way to set realistic expectations for your own real estate goals is to get real-time data on what is happening in your neighborhood (that’s where we come in!).
#4: Finances count now more than ever.
Being ready to buy a home last year and this year may be two different things. As rates change and the market resets, we encourage every potential buyer to re-run their qualifying amounts. Ensure that you are comfortable with what your maximum mortgage payment could be given today’s rates. Remember too that you are ‘marrying the home, but not the rate.’ Don’t settle for a home you can afford if you don’t love it! You may be able to change your rate via a refinance later, but you cannot change your home’s neighborhood or overall concept quite that easily - if at all.
If you have any questions at all abut these 4 must-know housing realities, please do not hesitate to reach out. The next thing to do is what the next right thing is for you! We are always here to help you figure that out whether it means a home sale or not.
Let’s chat soon,
Mark
Mark Barber
Homes of Silicon Valley, A Proud Divison of Christie’s International Real Estate Sereno
408-290-0072
mark@homesofsv.com
DRE 01220031