Phil Immel
question: I am thinking of buying a house within the next two years.How do you “scale” the market for the best deals? – Samantha A., San Clemente
answer: Dear Samantha, everyone wants to “timing” the market and buying the “right”. Just like the stock market, there are no secret formulas. Here are some important factors to consider:
Seasonality in real estate is the annual cycle in which buyer demand fluctuates. Ideally, buy when competition is low. Best season he January and he October-December. December is the best month, as most buyers will be busy over Thanksgiving and New Year.
Usually late until Super Bowl Sunday. The 2nd and 3rd quarters are the most competitive months, and summertime starts in his March. The rainy season is over, the flowers are blooming, and the signs of spring.
After March 2022, the Fed began raising interest rates rapidly to combat inflation. Mortgage interest rates he went from 3% to over 7%. By October, buyer affordability had eroded and demand had subsided. However, buyer demand is still strong and steadily increasing.
In a previous column, I predicted that mortgage rates would drop to about 5.5% by July. why? The housing market took the worst hit as the US Federal Reserve (Fed) overreacted to his one-year rate hike.
The number of homes sold will drop by nearly 50% from 2021 to 2022. Real estate is concerned with supply (available listings) and demand (demand of eligible buyers). When rates more than doubled his in less than six months, many buyers were no longer eligible to buy a home. When the rate drops from his 7% or higher to his 5.5%, the opportunity opens up for the buyer to re-qualify.
As sales fell by nearly 50%, so did the number of listings (inventory). why? More than half of homeowners took advantage of home refinancing at the lowest interest rates in decades.
Lower inventories and buyer demand will keep home prices strong. “Wait until the market crashes before buying,” many buyers say. Many economists and so-called “experts” believe that house prices will fall by 20-30% this year. i disagree. Their models have little correlation with the realities of our coastal markets.
Expert predictions in the past have often been inaccurate. So buyers are confused about timing. home is home It’s a product like a stock. A home has real value and is often your greatest asset in life, generating wealth and enriching your retirement life.
Just ask how much your parents paid for a house 40 years ago. Now it’s worth at least ten times more.
Property prices and interest rates move slowly. Don’t expect interest rates to fall below 4% he again. It happened because of COVID.
In my 40+ years of selling homes, I have seen mortgage rates rise from 2.5% to 18.5%. Believe it or not, rates below 6% are relative deals based on historical data. Another benefit is interest deductions for loans up to $750,000.
As a young family just starting out, be serious about buying a home this year. Get pre-approved for your loan. Get ready to take the leap in the coming months by hiring an experienced real estate agent.Have a real estate question?Email Phil Immel phil@realestateguru.comVisit realestateguru.com. Guru has over 40 years of experience listing and selling homes in South Orange County. A licensed real estate broker, Phil majored in real estate at San Diego State University and is also an expert in mortgages, titles, escrow, appraisals and negotiations.
