The Southern California housing market suffered a slow 4th quarter.
The latest real estate numbers are out, so I’m here today to share them with you. We had a very slow fourth quarter of 2022 here in the Southern California market, and we saw that inventory is taking longer to sell. Also, the average number of days on the market was around 45 to 60 days, depending on the neighborhood.
In November, interest rates were around 7.25%, but as we go into the spring of 2023, interest rates have come back down into the high 5% and low 6% range. This interest rate drop has brought many buyers back into the market.
The biggest challenge in today’s market is very low inventory. In fact, we are seeing the lowest inventory levels since the beginning of the pandemic. Also, we’re starting to see multiple offers on properties again and people fighting over homes that are in great condition. If a home is priced well, it’s not uncommon to see multiple offers. Multiple offers way above the list price are uncommon, but homes priced correctly or below market value can still get offers above the list price. Even homes on the market for a week or two may still receive multiple offers.
“This interest rate drop has brought many buyers back into the market.”
Buyers are taking a little bit more time with viewing properties and making decisions, so there can be some excellent opportunities if you are considering selling a home and moving into another one. One of the biggest challenges many sellers have right now is that if they live in a home and want to move to another one, they’ll be giving up their 2.5% or 3% interest rate for a 6% interest rate.
Fortunately, there are some great opportunities for that. We have interest rate buydowns, and we can look at what options might make the most sense for you. A great opportunity is for people who are looking to downsize. People who have lived in homes for a long time can move into a smaller home, and especially if they’re over the age of 55, they can carry their property tax base with them anywhere in California.
If you have any questions about the state of the market or real estate in general, please feel free to reach out to me. I would love to serve as your resource for all of your real estate needs.
