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DEMAND IS PLUNGING!
For nearly two years sellers got away with arbitrarily pricing a home where nearly everything sold instantly. However, those days are gone and the Federal Reserve has done everything in their power to “reset” the housing market. As a result, mortgage rates have skyrocketed from 3.25% at the start of the year to 7.12% today. Affordability has taken an overwhelming hit and demand is now down by 43% compared to last year. Consequently, the Expected Market Time, the amount of time for a home to open escrow, has grown from a record low of 19 days in mid-March, to 77 days today.
BUYERS: FINALLY A BUYERS MARKET! Buyers now have the upper hand when negotiating in today's market, which means seller must painstakingly arrive at a mutual price to be successful. Pricing homes in this market needs to be based on location, condition, upgrades, amenities, age, decor, and overall appeal. Negotiations are now leaning in favor of buyers, prices are slowly falling, and with affordability taking a drastic hit, buyers are unwilling to stretch, and they will do their due diligence before writing any offer.
SELLERS: PRICING IN CRUCIAL! Pricing a home accurately is crucial in this market. Sellers must be patient. The housing market is no longer instantaneous. The closer a home looks to a model, the faster it will sell. Pricing a home at the last comparable sale, yet it needs a lot of work, will simply not sell in today’s market. As a result, sellers have a choice. They can either invest in their home and update it prior to placing it on the market, or they can adjust the price to reflect the work that needs to be done. Buyers will also subtract for the hassle to do it themselves. With the market leaning in the buyers favor and values slowly falling, careful pricing is crucial.
Included below is your Irvine Real Estate Market snapshot. I am your local resource for all your real estate needs. Referrals are always appreciated.
- Ellie Yung, Your Orange County Real Estate Specialist
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