Source: Steven Thomas Housing Report - October 7, 2019
In consideration for purchasing a home, buyers tend to focus a bit too much on their price budget, and not their monthly payment budget. After settling on a home and closing, the price no longer matters as much as the payment that is withdrawn from the checking account every single month for 30-years.
Much of today's market talk focuses on how high values are today. For detached homes they are up 60% in Orange County since bottoming in 2011. Homes have appreciated significantly from that 2011 bottom point through 2017. In June of 2017, values eclipsed the record peak reached prior to the recession in June 2007. Since breaking the record, values have only increased slightly, homes are just not appreciating much at all in 2019.
Many buyers are sitting on the sidelines and waiting… and waiting. Economists and housing experts make looming predictions about the possibility of a coming recession due to a variety of global influencing factors. These buyers are using this information to try to time the market to their advantage. Yet, those same economists and housing experts will attest that timing markets is next to impossible. As a result, many capable buyers have been permanently sitting on the sidelines rather than cashing in on an excellent opportunity.
Housing is in a very good spot right now and it has everything to do with interest rates. In November of last year, the 30- year mortgage climbed all the way to 5%. Consequently, housing slowed to a crawl. But, since then rates have plummeted to 3.5%, that is down 30%. That translates in into serious savings: For a $700,000 loan, that difference in interest rate is a $614 per month savings, or $7,373 per year. The difference is quite dramatic, and should instill a greater sense of affordability among today's buyers.
To the buyers who are waiting, now may be a better time than ever if you are looking for a home in the near future. In Orange County, demand is up 13% year over year and the active inventory is down 8%. And, unlike last year, the inventory is dropping right now. It will continue to drop through the end of the year and 2020 will start with a lot fewer homes than the start to 2019. With lower rates, demand will be stronger at the beginning of 2020. As a result, the market will be a lot hotter than what everybody has become accustomed to. Now is the time to cash in on these great rates before demand continues to rise along with prices.
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RECENTLY SOLD
in Laguna Beach
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12 N. Portola, Laguna Beach
Represented Seller
Sale Price: $3,300,000
3bd, 3ba, 2441 sqft |
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3143 Bonn Drive, Laguna Beach
Represented Seller
Sale Price: $1,750,000
4bd, 3ba, 2057 sqft |
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336 Canyon Acres, Laguna Beach
Represented Buyer
Sale Price: $765,000
2bd, 1ba, 725 sqft |
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895 La Mirada St, Laguna Beach
Representing Seller
List Price: $1,299,000
2bd, 1ba, 1,188 sqft |
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CURRENT LISTINGS
Laguna Beach
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1576 Del Mar Ave - For Rent
3 bd, 2 ba, 1,476 sqft
$4,200 / mo |
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MARKET STATISTICS
Laguna Beach
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Active - 261 (Down 12% vs. Aug)
Pending - 45 (Down 35% vs. Aug)
Sold in September - 42 (Up 55% vs Aug.)
Under $1,000,000 - 5
$1,000,000 - $2,000,000 - 21
$2,000,000 - $3,000,000 - 8
$3,000,000 - $5,000,000 - 4
$5,000,000 - $6,000,000 - 3
$7,370,000 - 1*
*Sold by the Horton Team
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