November 18, 2020
By Saeed Ghaffari
(A must read for agents, buyers and sellers)
Interest rates are historically low post presidential election. After the 2016 election, rates went up from 3.47% to 4.2%, reports Freddie Mac.
- In 2012 rates essentially stood still. They were at 3.38% in October and 3.35% in December
- For 2008 the news was good. Rates went from 6.2% in October to 5.29% in December, a substantial drop
- In 2004 rates were largely unchanged. They stood at 5.72% in October and 5.75% in December
No one person, entity or body of government sets the mortgage rates, not even the federal reserve. That said, their policies impact the financial market worldwide and the rates rise and fall their fluctuations. Will they remain this low or will they go up? It’s yet to be seen, ho knows, I am no economist! But one thing is certain. They don’t seem to be getting any lower. The already historic low rates have boosted up the housing affordability all across the nation and that’s why we have a seller market and a buyer frenzy in So Cal.
So Cal Market Beat
The total active inventory dropped all across So Cal by an average of 1.49%. The new listings also dropped in every county with the exception of Riverside, averaging 1.67% drop in the region. MLS shows 4681 stale listings with 100+ days on the market. Why aren’t these properties selling in such an aggressive seller market? Here are some possible justifications. A) some are in higher price range, multi million dollars and that’s within the norm, B) some have restricted showing and poor marketing, and C) most fall within an overpriced category. I doesn’t matter how strong of a seller market it may be, properties will sell only at what the market bears. These properties either have a seller on a high horse with an agent who is an order taker or doesn’t know real estate. Either way, these properties and the ones in category B pose potential bargain opportunities for hard to please buyers or soon to be expired, a new listing opportunity for agents who have mastered the skills of calling on expired listings.
The closings also dropped in every county with an exception of Riverside, averaging 5.24% drop in So Cal. As a result of overall drop in activities, lenders and service providers seem to be picking up speed in their closings and the average days in the market improved through the region with an average of 3.66%, except for Los Angeles.
The region shows 691 properties in the coming soon category, opportunities for the early birds, some big worms, the dirt and the improvements on top of it.
Considering the season, the unfortunate surge in the COVID cases and upcoming pending changes in the White House, I would not worry about the condition of the market, at least not yet.
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