It's a little soon to be talking about 2023 without it only being speculative. As of now we're seeing rates around 6.25% on a 30 year fixed. We've been told the feds are going to cut back on the rate hikes as we're seeing positive signs in the economy with inflation. We're not out of the woods yet!
Home prices in Placer county are down 10-15% from the high in July 2022. Prices over time will continue an upward trend. This correction has mostly to do with supply / demand and of course the value of the dollar. Inflation was caused by the government printing money and wreck less spending. I don't want to get political here but I prefer our gov. to be conservative when it comes to economic policies. To be transparent, I'm more liberal on other things. Really though, I guarantee they don't manage their own finances like they do the tax payers money. At what point is the deficit going to be unmanageable? Are we already past the point of no return? The scary answers to those questions I believe is that the interest payments alone are unsustainable and we'll default. Next question is when? I think the answer to that questions is scary too, not too far away... maybe within 5 years. With the impending default, what will that do to our county? Not an easy one to answer! We're in a global economy now and defaulting will cause a ripple effect and likely take down other countries too.
It's only Jan 6th and my phone is already ringing. I'm going to show a house in 45 minutes to a buyer. Sellers are calling looking for a game plan. I was curious before Christmas how this year would start out and it's going better than I expected. There will be plenty of business out there. People are always having to move. Weather its for work, marriage/divorce, kids... there's always activity. We are expecting more people to hunker down this year. A lot of people like myself are in a cozy fixed rate mortgage and don't want to mess with anything in the 6's. We're going to see roughly 30% of real estate agents get out of the business. There's simply not enough deals to go around. There's the ol saying too, 20% of the agents do 80% of the work.
For buyers out there, my advise is to run numbers with your lender. If you don't have a good lender, I can recommend several. Find your comfort spot on payments and that will dictate your price range. Review all your options with the lender. ARM loans, jumbo, bridge... Over the past 20 years selling real estate here at Re/Max Roseville, I would stay away from ARM loans, but now I think it's a viable option. Get in with a better rate and look to refi in 5 year. Do an ARM loan with a seller credit to buy down the rate! Get it in the 3's maybe.
With regards to selling a property in Placer county right now, we're looking at a downward trend in prices. If I was a betting man, I would guess this downward trend will change come spring. It's likely better for a seller to hold off from going on the market right now. I put more power in the buyers position, but as I mentioned I think that will change. We're accustom to seeing the market down in the winter and up in spring. This trend is likely to repeat.
With all this said, I don't have a crystal ball. We can only use the information we have at hand and guess as to what the future holds. One thing I've learned is that it's all about perspective. Eye of the beholder.
I welcome a strong and productive 2023 selling houses in Roseville and Rocklin.
Cherio!
