The Great Deceleration
The past few weeks have been an extremely volatile time for the real estate market. There have been swift changes taking place that were only inevitable, but they are finally happening. A combination of factors have caused a slow cooling-off effect to take place on the red-hot real estate market. With increases in prices and demand setting record highs for nearly two years, a cooling off period was overdue. These dramatic increases could never continue forever.
Over the last 12 months home prices increased 19.8% while wage growth only grew 4.8%. These wide margins could never realistically continue. However, home prices are not predicted to drop. There is still an uneven balance of demand versus inventory that exists. Particularly in our area there is a lack of new building that exists and young families attempting to enter the market for the first time. This places a strain on the market. Home prices are extremely unlikely to decline due to this specific reason. However, it is making it more difficult for first time home buyers to enter the market.
Mortgage rate increases are another reason for the deceleration in the housing market. In order to fight inflation mortgage interest rates have risen from 3.11% to 5.25% in just barely 5 months time. This is an astronomical rate increase and can mean the difference of affording a home or not. Some buyers that were previously looking within a price range are now forced to reevaluate their plans. The best thing to do if you are looking at buying or selling is to seek the advice of a local real estate professional. Our team Moorpark real estate team is here to help you get an accurate valuation on your home so that it is priced to sell for the highest possible dollar amount. We are also here to help our buyers navigate such a dramatic shift in the market and how best to handle it. Now more than ever it is important to seek the advice of an experienced Moorpark real estate team so that you do not make an unwise financial decision.