What’s happening nationally in real estate? Hi, this is Tanja Odzak with Our East Bay Home, brokered by eXp Realty, with everything you need to know about the changes in the housing market for the month of October.
Calculated Risk concludes that the annual growth rate of 19.7% is probably close to a peak, and that the year-over year price increases will slow down as the year continues. Closings are set to decline roughly 10% year over year in the second half of 2021 and home price appreciation is on the cusp of flipping to a decelerating trend. Again, there will be an appreciation trend just in a slower more moderate paced performance rate compared to what we have been seeing in the previous months.
This being said, prices are not necessarily declining, they are just appreciating slower and predicted to appreciate 32% in the next five years. Buying now before prices continue to exceed expectations is important; and buying now would be mission critical!
AND.. You can do this! I can help you redefine possibilities.
When we forecast the fourth quarter of the market with the pandemic being in place, fall is usually the start of the slower season… but we all know this has not been a normal year due to the circumstances. Potential buyers are seeing a slight rise in inventory while mortgage applications jumped over 7% which is the highest level we have seen since April. Things are slowing down, but that’s relative and it’s because the last two years have not been normal; however, 2019 was the last normal year and we are already doing exceptionally better in existing home sales in comparison.
When will listings peak? They can continue to grow, it could continue at the rate it is… like it did in 2020, or fall… but there are three reasons listings can continue to increase throughout the fall and into the winter months.
- There is a pent up selling demand and homeowners are starting to feel more comfortable with the idea of putting their home on the market since the pandemic is shifting and as more people are getting vaccinated; therefore, having people into their homes for open houses or property tours is less of a potential risk.
- New construction is taking place and starting to grow more rapidly, allowing more options for potential buyers and current homeowners to consider when they sell; there is no longer a lack of options compared to the options other sellers had in the past.
- It is the end of the forbearance and is creating new listings. Do not worry this will not lead to a wave of foreclosures, but it will allow homeowners to be able to sell their homes and have enough equity to more than cover the expenses of actually selling.
As far as interest rates are concerned, it is possible that their rise in the next year could bring prices down, that may result in economic, financial and confidence challenges… even with solid buyers in place. However, these drops or flattenings are nothing to concern ourselves with as they will not come close in comparison to the crash we saw during the Great Recession. Freddie Mac shows there is a 3.01% rise in mortgage rate and many factors lead to this increase. The economy is recovering, not as quickly as we would like, but it is slowly making a comeback; there will be no sharp spike in a rise of prices… just a gradual growth inching back up making interest rates rise a bit. The buyer purchasing power will cost more and financing will be harder as the rates also rise.
Let’s connect and talk real estate. Let’s redefine possibility, and I will help you!
I’m a Top Producing Realtor® in the OAKLAND / BERKELEY / EAST BAY AREA. I’ve been in the San Francisco East Bay Area since I came up to do my undergrad at UC Berkeley (a long time ago!), with a short stint at UC Davis while getting my Master’s. I take my duties as a Realtor® and Fiduciary very seriously, I enjoy educating my sellers and buyers along the way. Putting People, Before Profit.
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