CONTINUED LOW RATES HEAT UP MARKET

Source - Irvine Standard & Stephen Thomas OC Housing Report

Those record-low interest rates you’ve been hearing about? Economists predict they’ll stay under 4% through the first quarter of 2020.

The Fed’s unanimous vote to leave interest rates low – combined with low inflation – will keep rates down, according to Bankrate Chief Financial Analyst Greg McBride.

“Inflation remains tame and long-term rates are settling, pulling mortgage rates down just a bit,” he said in January.

Understanding the impact of mortgage interest rates can mean a lot to an Orange County family’s pocketbook. In fact, a family could save hundreds of dollars each month by purchasing a new home now compared to this time in 2018, when mortgage rates were at around 5%.

When interest rates dropped to historic lows in December, they drove up Orange County home sales by 32% over year-ago levels, according to the California Association of Realtors.

And for good reason.

Interest rates now hover around 3.75% for a 30-year mortgage. That’s a drop of more than 125 basis points from their peak in 2018. That difference saves buyers about hundreds of dollars each month on a new median-priced Orange County home – adding up to hundreds of thousands of dollars over the life of the loan.

The question then becomes, “Is now the right time to buy?” The numbers suggest that the answer is yes, and buyers are definitely listening.
(Check out our local market stats at the very bottom that show a dramatic increase in pending sales!)

Homes for sale in many price ranges (nearly everything $1.5m and under) have now dipped below 60 days on the market, which is typically an indicator of a seller's market. After already starting the year with low inventory, demand continues to outpace supply in all but luxury price ranges.

It's important for buyers to keep an eye on new arrivals, and be prepared to come in with strong offers.

And just as important, sellers need to keep in mind: (especially those in the luxury market) Overpriced, overzealous list prices result in wasted market time and do not generate offers. Pricing at or close to the Fair Market Value is the wisest formula for success, maximizing demand immediately upon coming on the market.