My quick life update before my market update (if you are not interested in my life shenanigans, scroll down to the good stuff below).
4th quarter for us involved lots of time with our family as it kicked off with Thanksgiving weekend in PA and continued all the way through Christmas in VA.
Now let's get into some important updates from the last few months.....
If you own a house or a rental or know someone that does: (no new updates in this section so you can skip to the next one if you want)
Short Term Rental Laws officially came into Effect on May 1st, 2023
Have you ever wondered what you might be able to additionally build on your property?
Are your electric bills out of control? If so, consider installing solar panels like many of our clients have. Reply to this email and I will connect you with my trusted solar contact, Eric.
If you are planning on selling or know someone that is thinking about it:
4th quarter was definitely leaning in the buyer's direction for the most part. There were unique situation where if the home was really priced right and had just about everything a buyer wished for, then, you would see multiple offers. However, that was the exception, not the norm. Several of my investor clients, I recommended that they wait till January to list their rehabs if that option was on the table.
The median price for all of San Diego County for all detached homes ended up at $949,000 at the end of December. That is a significant drop from end of September, where it was at $999,000. However, if you compare it to the end of December of 2022 median price, it actually increased by 9.71% because the median price then was $865,000.
Attached homes showed a small decline, dropping from $660,000 median price at the end of September to $650,000 at the end of December. Same here, if you compare it to end of December of 2022, it actually is still 11.11% higher than what it was then at $585,000.
Available inventory kept dropping in the 4th quarter and it went all the way down to 2,576 at the end of December. That is VERY LOW once again! That time last year, inventory was hovering around 3,000 and in the beginning of the 1st quarter of 2023, it kept declining to a low of 2,334 in the first week of April. That's also when the market went bananas again and we had substantial appreciation. We are anticipating that the market will heat up once again in the 1st quarter of this year, especially that the interest rates dropped pretty significantly in the last two months. It should be prime time to sell your property if you are considering selling.
With that said, first week of 2024, listings increased dramatically but this is par for the course for the first week of the new year. The same thing happened last year. A large chunk of these are just expired listings that immediately re-listed...also par for the course. (See graph below)
To sum it up, 4th quarter was a buyer's market as anticipated due to higher rates and the holidays.
In conclusion, if you list now, we should see increased showing activity due to the time of the year and lower interest rates. If priced right, we should see 2-3 offers within the first week or so, however, I would not necessarily call it a full on seller's market just yet.
If you are planning on buying or know someone that is:
Buyers were in control in the 4th quarter and they were receiving all types of credits towards interest rate buy-downs and closing cost assistance, which was very much needed in the most un-affordable time in our history.
Interest rates shot up all the way to 8% in October and then dropped significantly to below 7% by the end of the year. This made it a very opportune time for buyers to get in the game where the market was very slow, and the few sellers that were selling were willing and motivated to make a deal happen. (see graph below)
If you were a VA or FHA buyer in the 4th quarter, there were even quite a bit of opportunities to assume a loan at below 4% interest rate. That basically means that if you were buying that particular home with an assumable loan, the buyer would apply with the seller's mortgage company to take over the existing loan and transfer it to the new buyer's name at closing, keeping all previous mortgage terms in place.
We are still anticipating that the "California Dream" program will be offered in the 1st quarter of 2024. This program allows buyers to get a 20% down payment assistance, however, I don't expect it to be around and available for long when it does drop.
Learn more about the program here: https://www.calhfa.ca.gov/dream/index.htm
Big take-away: It was a very popular program so when you see another roll out of this program or something similar, I suggest you reach out to us quickly so we can jump on it. Actually, you should start talking to your lender now and submit all your financials so they have everything on file and ready to get you locked into this loan when it becomes available. (You will need to have an offer accepted on a home, of course, at that time as well)
If you are planning on buying in the 1st quarter of 2024, I do think it's a great opportunity for you, especially if you are a first time home buyer, because you might be able to lock in a rate in the 5's, which we have not seen in over a year and you should have more homes to pick from because the inventory should continue to increase now based on various economists's projections that I follow.
And as always, If you are planning on relocating to another state even though I would be sad to see you leave, let me know and I can help locate a great agent in whatever city that you are planning to move to. I will actually identify a couple great agents there, interview them on your behalf and connect you to that agent once I feel like he or she can serve you as I would here. (Bonus: I would stay involved over-seeing your purchase transaction on top of it for you and consult you along the way. That's if you value my opinion, of course.)
I wanted to wish you a Prosperous & Healthy New Year and a fantastic 1st quarter! Let me know if you have anything specific that you want to discuss with me. I am here to help you navigate through it all and yes, I would love it if you can refer me to anyone that is thinking about buying or selling. Thank you in advance!
p.s. Thank you to our client, Greg Helbeck for this 5 start review!