I’ve been consulting with Steven Thomas, chief economist for Reports on the Montecito Market Trend 2023, who specializes in the Southern California Real Estate Market. Here are some noteworthy trends:
1. Mortgage interest rates have fallen for 4 consecutive weeks— from over 7 percent to 6.28 percent.
The Federal Reserve (Fed) grabs headlines with ¾ percent rate hikes, but these are for short term rates such as for cars and lines of credit. There may be bumps up and down, but the trend is downward for mortgages.
2. The Consumer Price Index (CPI) has bounced off the high numbers it set several months ago. It looks like there is a lid on the CPI and that it is trending lower, which is in our favor.
3. Wall Street loves this trend.
4. Jobs are abundant and income for workers is rising. That sounds great, but the Fed wants less pressure on rising paychecks. They want unemployment to rise. Rising unemployment will get a very positive stock market reaction because that means the “Fed’s medicine is working.”
Takeaways and Predictions
It’s traditional during the holidays for fewer homes to go for sale and for fewer to sell. The fast-paced COVID market did not create lasting change in the rules of Supply and Demand. Supply is still restricted and there are people still wanting to buy.
Some sellers who missed the booming 2021 COVID market are wishing for a quick repeat. That market has already moved on. Values are coming down from the frothy fear-based buying conditions as the COVID market ended. There is a 2/3rds chance of a recession. By summer it will likely be apparent to everyone that the recession, if there is one, is going to be mild.
542 La Marina
Sold Over Asking Price
“Let Scott take the wheel and you will be a comfortable passenger.”
– Cari and Michael
The coming post-COVID market is showing itself: Agents cannot simply be rah-rah cheerleaders for home sellers who expect continuing COVID conditions. Some sellers will be lured into starting out very overpriced. Buyers are aware of the price uncertainty going on right now. Buyer reluctance to make offers will likely dissipate by the second half of 2023. This balance between low inventory and willing buyers will keep the market moving at a steady but less intense pace. Luxury home sales are normalizing, with longer marketing times.
When you want someone to help you get even more value from your home sale, I’m your guy. Give me a call and we can discuss the marketing of your property.
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