Market Update: November 2018
If you’ve been thinking of selling your home, this is very important.
That’s because this message will show you how to get a significant advantage over a lot of other home sellers in who will be listing their homes in the next few months. These are the current conditions in the Silicon Valley housing market:
- Mortgage rates have hit a 7-year high.
Several weeks ago, the 30-year fixed mortgage rate broke through the 4.6%-mark, the highest level since May 2011.
This is part of an ongoing upward trend in mortgage rates, which started over a year ago.
The thing is, in spite of the rate increase, mortgage applications spiked in September. This is a signal that buyers expect rates to go up even more in the near future—something that’s very well possible given current conditions.
- Affordability of homes in Santa Clara has been dropping, and demand has followed.
For the past several years, home prices have increased at twice the rate of inflation.
For a while, this didn’t have too much of an effect on the market, because there was so much demand and rates were so low buyers could still afford the rising prices. Also, buyers in our area have been using lots of unconventional ways of qualifying for loans, like employee stock purchase programs (ESPP). However, the continued price growth and the mortgage rate hikes have finally got to buyers earlier this year.
Alsothe stock market has given back all its gains for the year and will not be able to keep up its bull run of the last few years.
- Homes are taking longer to sell and more home sellers are reducing prices.
Not surprisingly, the combination of sustained high prices, increasing mortgage rates, and a drop in demand is finally starting to have an impact on the real estate market.
The signs are showing that this is not just a seasonal correction but more of a real estate slowdown as there are some worrying indicators.
Crucially, more sellers are now reducing prices. More than that 35% of homes listed as of November 8th had a price drop.
What does this all mean for you?
If you’ve been thinking of selling your home, then the time to act is now.
In spite of the slowing of demand and prices falling, there are still many hungry buyers on the market and inventory has finally started to drop for the holiday season.
This means you can still sell your home quickly and avoid more signification market corrections that are coming next year.
Next year expect demand to slack off as more homes come on the market, interest rates increase and the stock market drops further. As more homeowners decide to enter the market in spring, it will drive down prices further and really ushering in a buyer’s market.
That’s why it can make a lot of sense to move early—before this kind of awareness reaches the majority of homeowners.
If you are considering selling, you can get started now by getting an idea of what your home is worth in the current market and what homes are currently selling for in your area.
Simply try out this home value calculator, which is based on recent sales:
Enter your home address here to receive a report of what your home is currently worth.
And once you are ready to get the process rolling give us a call at 408-582-3272. We’re here to help.