How's the Market?
The real story on where the housing market is NOW.
All about that home EQUITY
"Marry the house, date the rate"
Under pricing versus Right pricing
1.) HOME EQUITY
While watching the stock market these last few weeks may feel like self-inflicted pain, checking the value of your home should still come as welcome relief. For homeowners, your net worth got a big boost thanks to the phenomenal rise of home prices. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes that during today's stock market volatility...
“. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”
The Montecito Market received a much needed boost in inventory last week, however sales still seem to outpace inventory with only 41 properties actively listed for sale, tipping the scales to maintain a Seller's Advantage.
2.) MORTGAGE RATES
With mortgage rates that have effectively doubled this year, a lot of Buyers are priced out of the market. I heard a great line this week: “Marry the house and date the rate,” It is so easy to refinance and most homeowners refinance or sell their home before paying off their mortgages. Now might be the time to get creative and consider interest-only financing. This option greatly reduces your monthly payment and there are many creative lenders out there to help you achieve your goals - something that did not exist in the 70’s and 80’s when interest rates ballooned to 18%!
Now that the market is returning to a more normal pace, pricing needs to be topic #1. During the stampede of the last 2 years, the Buyer demand and low interest rates set the market price for luxury homes higher and higher without looking at any analysis. The days of underpricing or “event pricing", setting the stage for a “bidding war”, are over.
Inventory is low, which is good for Sellers, but Buyers are cautious and there is much less competition. The good news is that there is a lot of very recent data to evaluate home values and they are still rising (albeit at a much slower pace) and low inventory will keep the balance in the Seller’s favor as long as your home is priced right.