I wish I could show you the email alerts I get throughout the day. Everyday more homes are going pending despite interest rates near 7%. Yes, most of the action is happening on homes priced below $550,000, but can you imagine what that means when rates drop back below 6.5, 6.25, 6%? (See the market action chart for Sacramento County below) We are also nearing a bottom for inventory supply, fingers crossed (see chart below). We want to look for more homes to come up for sale now through the summer. This will allow for a more balanced market instead of a lopsided one like we saw in 2021 filled with high competition and overbidding. Traditional sellers are usually people that also need to buy a replacement. That's the current situation we find ourselves with rates being higher. A traditional seller doesn't want to trade 4.5% for 7%, but does it make sense at 6 or 5.5%? We shall see. There is a lot of national jobs data coming out this week, which is a key indicator the Fed is watching. The Fed would like to see less jobs being created (less demand) and jobless claims to go up (less demand). If you hear interest rates hit 7.25% then you'll see news blasts saying the job market remains hot. If we see less jobs created, and more jobless claims then watch for rates dropping below 6.75%. I found the final image to be extremely profound. What are you seeing or hearing? I'd love to know paul@guiderealestate.com |
