Appraiser Ryan Lundquist, via the Sacramento Appraiser’s Blog, shares five interesting observations regarding the effect of rising interest rates on the local housing market.
ALTHOUGH PRICES ARE STILL RISING, THE ESCALATION HAS SLOWED
CONSIDERABLY.
It may not sound sensational, but prices in most area counties are risen “just 6-7%” compared to 15-20% from last year. This rate of growth is actually reflective of a normal year, but it’s a good idea to keep an eye on these numbers.
BUYERS ARE PAYING JUST BELOW LIST PRICE
For nearly a year and a half, buyers paid at or above the list price. Although highly unusual, this type of market has been our normal for so long that we’ve become accustomed to it. In June 2022 buyers actually paid about 1% BELOW list price. It’s actually a very normal statistic when compared to 2018-2019, but it’s another statistic to keep an eye on.
FEWER PENDING CONTRACTS
Interestingly, the number of pending contracts has decreased for three months in a row. This statistic isn’t a big surprise with rising interest rates affecting affordability. Many buyers are either sitting on the sidelines waiting to see how things go—or were forced to the sidelines due to declining affordability.
LISTINGS ARE ON THE RISE
Although the inventory is lower than “normal,” we have a much higher number of homes available. However, the real reason for this increase in current inventory is that with fewer pending contracts, the amount of active listings has grown quickly.
PLENTY OF PROPERTIES STILL SELL ABOVE THE LIST PRICE
Last month, over 50% of home sales sold above list prices. Although it’s a marked changes from last year’s number of 75%, it’s still a very healthy statistic.
A NOTE FROM KYLE
In today’s real estate market, things change quickly. Now more than ever, an experienced agent with great neighborhood knowledge is more important than ever. Ready to learn more? Call today and let’s discuss your real estate goals.
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