Real Estate News July 2022

HAS THE REAL ESTATE MARKET PEAKED?

Home prices have have been on an upward trend since 2012 and exploded the last 3 years. Ten years is a long time for an up cycle. Previous factors that brought an end: 1) High mortgage rates 2) Layoffs and job uncertainty 3) Speculation and stated income loans. We are seeing mortgage rates jump from a low of 2.75% to the 5%+ range. Buyers who qualified in January at 3.75% do not qualify for the same loans or prices. The Feds are determined to slow inflation with higher interest rates. Many buyers must now purchase a smaller, less expensive home or switch to a more affordable area and are reluctant to use their retirement investments for a down payment. Some buyers will stop looking while others will be more selective, making overbids less common. All markets need a breather to remain healthy for the long run. Owning a home has been a great investment and still is. Currently we are still in a seller’s market but it is slowing. Real estate does not turn overnight like stocks but makes a slow turn. It is very possible home values will level off before long. Torrance is still a great place to live, super weather, good schools, easy beach access, shopping, excellent medical, lots of restaurants, and more. People will always want to own homes here no matter what the market is. Mortgage rates, jobs, and consumer confidence determine what they qualify for or are willing to spend. The best time to sell is when you are ready, but waiting until next year for higher prices may not pay off. We’ve hit the peak or soon will. Home values may stabilize—they do not have to decline. For more information or to create a sales plan for your specific needs and timing, contact the Millman Team.