Wednesday, November 15, 2023 / by Bob Cowan
THE EFFECTS OF HIGH INTEREST RATES AND LOW INVENTORY | SAN CLEMENTE HOUSING MARKET UPDATE SEPTEMBER 2023
Now that fall has arrived, the local real estate market is slowing down. What does that mean specifically? Let's examine the figures.
1. Demand The number of properties in escrow this month as opposed to last month is the measure of demand. Demand in Orange County has declined dramatically since last month, down around 8%.
2. Active Listing Compared to August, when we had about 107 active listings, there are now 113 active or coming soon listings.
3. Lowered Prices 13 price decreases, with an average reduction of $68,000, have occurred in the last week out of the 108 active listings on the market.
4. Interest Rates Lately, there has been a great deal of upward movement. For both conforming and non-conforming loans, rates are currently between the low and mid-sevens, exactly where they were one month ago. However, a few months ago, rates were in the low-to mid-sixties, thus there has been an approximate 1% increase in rates since then.
5. Closed Sales There were 47 closed sales in July. There were 60 in August, and as of today, September, there have been 39 closed sales.
6. Expected Market Time The amount of days that pass between a house being offered for sale and the start of escrow is known as the Expected Market Time. Orange County homes valued between $1 million and $2 million should be on the market for 43 days on average. The average time to sell a home between $2 million and $4 million is 98 days.
7. Selling Season Things are starting to slow down as we head into the autumn market, when demand and inventory are lower. The only thing that could spur an acceleration at this point would be a decreasing trend in interest rates. Although I don't think it will happen, we'll find out in the home market update next month.
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