That crazy start to the year we experienced was certainly short-lived. As quickly as the switch was turned on to buy, it was just as quickly turned off. Yet again, interest rates showed their control over the market. The rates now are almost 0.5% higher than what they were mid-January, and buyers didn’t like seeing that.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for Sale |
+3% |
Flat |
|
New Listings |
+7% |
-14% |
|
Homes in Escrow |
+5% |
+4% |
|
Closed Sales |
+12% |
+16% |
|
Median Sale Price |
+3% |
+5% |
Prices continue to increase YoY. Even though the large increase MoM was caused by the crazy start to the year, with fewer new listings in February compared to January, prices might continue to increase MoM. Especially given we’ve seen an uptick in activity and offers over the past week or so.
That Didn’t Last Long
With disappointing news regarding inflation being released, the rates quickly shot back up again, and buyers retreated to the sidelines. As I mentioned before, the real estate market is heavily influenced by sentiment, and with all these buyers retreating, it caused potential sellers to hold back. Having said that, new inventory is still hitting the market, and as before, the good homes that are priced correctly are still selling. They might only be getting 2-4 offers, but that’s ok and more inline with a normal market. That madness we briefly saw wasn’t normal. Could it be a sign of things to come if the rates drop again? Maybe? I do feel it will be a roller coaster year, and this is just the beginning.
Homeowners are Staying Put
According to a recent Redfin study, homeowners are staying put twice as long as they did 20 years ago. Most of those homeowners staying put are Boomers, with nearly 40% staying in their homes for 20+ years. 35% of Gen X have lived in their homes for 10+ years. With the overall national average being 11.9 years, here in LA, it’s 18.7 years. And for those buyers trying to buy, you can feel how this affects inventory. And who would blame the people staying when they have nowhere better to go and interest rates much higher than they already have? It seems like an unsolvable problem that will continue to have lingering effects on how people live.
