Summer vacations were clearly top priority in Q3 2022! Agents, sellers and buyers finally took a breath in June and July, regained perspective and by August the pace of sales picked up before the September rate hike. The Federal Reserve’s move proved to be more aggressive than many forecasted and by the end of September rates rose to their highest level in more than 13 years. Real estate sales slowed. More rate hikes are expected. Last week a trusted lender quoted 5.5% for a 30-year fixed, jumbo loan up to $3MM assuming solid credit, assets and a banking relationship.
Global equity, bond, currency and energy markets were in turmoil especially in September. Many transcended the moment were transported by the beauty of British pageantry to honor a Queen who embodied steadiness and continuity for her seven-decade reign. Recall Windsor Square, the first tract in our neighborhood, was inspired by the very best of Great Britain over 100 years ago. May we stand our ground confidently that our neighborhood and the generations before us endured uncertainty and challenges. Through change perhaps we can look to Queen Elizabeth for inspiration and grace.
UCLA Anderson Forecast reports California’s economy remains robust especially in defense and tech, but its outlook is weaker than it was three months ago as a result of the weakening national economy. State GDP is $3.36 trillion and California is chasing Germany for the #4 spot in the world’s GDP rankings. California households are becoming wealthier, on average, than those of other US states.
Expect longer market times and a slower pace of sales. Prices likely to remain relatively stable due to limited housing stock to meet demand. Inflation, Fed policies and equity market performance will continue to influence perception and sentiment. Elections on Nov 8th are also important so please vote the entire ballot. We are paying close attention at the local level which directly impacts the quality of our daily lives in this dynamic city with boundless potential.
Implications for Buyers:
Higher interest rates make housing less affordable and yet many still pay cash in our area. For those who are able, stay the course, put down roots and invest in your local community. Consider obtaining an interest only mortgages to manage cash flow today and refinance later once inflation is tamed. We believe real estate is still the best investment for enjoyment now, a vehicle for forced savings and for long-term appreciation. Timing the market often proves to be a fool’s errand.
Implications for Sellers:
Very few homes are for sale. Inventory is expected to stay relatively low as most homeowners are either mortgage free or enjoy rates below 4%. If you are considering moving in the next few years, now might be a good time to preserve the equity you have built.
The Loveland Carr Group has courageously navigated changing markets before, helping Hancock Park residents with their real estate decisions since 1983. Mortgage rates were over 13% then and there was a market for buyers and sellers. We would love to share our wisdom and perspective for your specific needs.
Contact us today at 323-460-7606!