Housing market even more competitive as higher rates kick in

Despite rising interest rates, buyer demand has yet to downshift in California. Home sales likely rose in March from February’s pace and several indicators showed a market that was even more competitive that it was in February with 71% of homes selling above asking prices and the typical home going from list to pending is just 8 days. In addition, the latest survey of REALTORS® suggests that few agents are experiencing buyers putting their search on hold or backing out of existing deals. Many would-be home buyers may be feeling a sense of urgency to complete their purchase before rates rise further, which is keeping the market tight so far.

Source: California Association of Realtors

First time on the market in over 40 yrs - sold to an ALL CASH BUYER!

Here is the cheapest home sold this week in Toluca Woods.

Asking price: $1,599,000

Selling price: $1,830,000

This fixer-upper home has 3 bed/1 bath, 2,210 sq. ft. of living space, and is on a 12,424 sq. ft. lot.

First time on the market in 46 years! Sold for $231K over the asking price – All cash!

More sellers are lowering asking prices

With mortgage rates now nearing 5%, many aspiring home buyers may have reached the top of what they can afford, especially as 40-year-high inflation affects the threshold for them.

As a result, the number of sellers dropping their asking price is growing at a faster clip than in the recent past. About 12% of homes for sale had a price drop during the four weeks ending April 3. That marks a jump from 9% a year ago.

Home prices are well above levels from a year ago. The average borrower is paying about 40% more than they would have for the same home a year ago on a monthly payment due to higher mortgage rates and higher home prices, according to the National Association of REALTORS®.

More consumers believe that mortgage rates and home prices will rise further, according to a monthly consumer sentiment index from Fannie Mae. “If consumer pessimism toward homebuying conditions continues, and the recent mortgage rate increases are sustained, then we expect to see an even greater cooling of the housing market than previously forecast,” Mark Palim, vice president and deputy chief economist at Fannie Mae, wrote about the consumer sentiment index’s findings.

However, some buyers may see an opening in the market. They may want to rush ahead of further mortgage rate increases or may see an uptick in new listings.

Source: “Rising Mortgage Rates Are Causing More Home Sellers to Lower Their Asking Prices,” CNBC (April 7, 2022)

4 major events occur within 5 days of selling your home.

1) The buyer has to do a final walkthrough of your home. This is to make sure the home is in the same condition that it was in when they initially put in a offer.

2) Buyer signs their loan docs. This means they are officially signing up for a mortgage.

3) The lender will fund the loan the next day. Funding the loan means the lender wires over the money the buyer is borrowing to the escrow company.

4) They day after that, the recording takes place. That means title has officially changed hands and you no longer own the home... it's officially sold!