As many buyers are aware, the market has been slowly shifting to a buyer’s market, and this is great news for buyers. Here are some reasons why buyers can get excited about the market right now:
1. Homes priced in the lower third of the price range in San Diego county have been showing continual slowing in price appreciation (realestate.com study). This slow down makes it easier for first time buyers to enter the housing market.
Between 2017 and 2018 there was a price jump of over 10% for homes in the bottom third of the market price-wise. But as of April of this year the market appreciated only 2.2% annually for the same homes. Obviously this is a big difference.
2. Mortgage rates are dropping…again. Yes, if you are a buyer you surely noticed that rates have dropped and there is a threat they will drop again. I have definitely noticed a big uptick in showings on my listings – many buyers are anxious to lock in low rates and prices that are not appreciating like they did in 2017 and 2018. 30 year fixed rates are sitting at an average of 3.875%; 15 year fixed rates are close to 3.375%.
One caveat to remember if you are a buyer is that with the above comes competition. While I do not think this will drive prices over comparative market value, such has been happening in the last few years, I do believe that homes are getting more showings now – even those that have been sitting on the market – so making a strong offer is important. In other words, if a home is priced well compared to comparables and you come in way under that, chances are you could end up in a multiple counter offer situation, OR another offer will come in and be accepted with no counter to you.
It is important to really understand the market in which you are searching, to have a solid grasp on comparable sales and not wait to make an offer – especially if a weekend is approaching, as that brings the possibility of more showings and thus other offers. It is smart to have a seasoned local area real estate agent on your side to help educate you as to the home and neighborhood facts and comparables.