Hey guys, on this month’s episode we’re going to explore some of the reasons why analysts are predicting 9-16% property appreciation this year!
With interest rates taking a big leap up to about 5% this quarter, how are analysts still predicting such massive property appreciation? Interest rates needed to be increased across all industries to slow down the market and that generally results in prices slowing down, but instead they are continuing to rise.
Inventory
After looking at all the analyst reports, the one common concern is of course inventory. Post-pandemic, when interest rates were down to 2% or so, we had too much demand. With rates returning to normal, we now have normal levels of demand but a severe lack of inventory. Inventory levels are 54% lower than the 2019 pre-pandemic levels. A majority of analysts are predicting that we won’t have pre-pandemic inventory levels until at least 2024.
Market view the last 30 days
If we look at last month’s figures, we saw 1,718 new homes hit the market, while around 3,000 homes got sold and around 2,300 homes went into escrow.
Buyer Advice
While the higher interest rates will affect your mortgage payment, this should also open up new buying opportunities out there, due to the relatively lower demand. If the higher rates are working out tighter on the wallet than initially intended, perhaps you could house hack. For example, find a property with an ADU that creates more income for you on the side and reduces the overall expense burden. I’ve personally done this, and it’s also a great way to get yourself into a nice neighborhood.
Seller Advice
We’re currently seeing a trend of properties that aren’t upgraded and they end up just sitting on the market for a while, or aren’t selling for their peak price. I recently had clients who got $300,000 over their asking price because they prepared the property accordingly and did not skimp out on renovations. We can help you fix up your property by unlocking your existing equity to finance such renovations. When you’re ready, give us a call!
If you ever have any questions at all, please reach out to us!
- If you are thinking about buying or selling we would love to help!
- Visit us at TrueLocalRealty.com
- Or give us a call at 888-503-3117
We have Top Realtors in: Oceanside, Carlsbad, Encinitas, La Jolla, Pacific Beach, Ocean Beach, Cardiff, San Diego, Vista, San Marcos, Escondido and more.