From cnbc – an excerpt:
Some local markets are seeing even steeper declines over the last few months. San Jose, California, saw the largest, with home prices now down 10% in recent months, followed by Seattle (-7.7%), San Francisco (-7.4%), San Diego (-5.6%), Los Angeles (-4.3%) and Denver (-4.2%).
Home prices were still 14.3% higher in July compared with July 2021, which is more than three times the historical annual price growth, but the majority of that growth took place over the first five months of 2022, before the big spike in mortgage interest rates.
The average rate on the popular 30-year fixed mortgage began this year right around 3%, according to Mortgage News Daily. It climbed slowly month to month, pulling back slightly in May but then shot more dramatically to just over 6% in June. It is now hovering around 5.75%.
“We’ve been advising for quite some time that the dynamic between interest rates, housing inventory and home prices was untenable from an affordability perspective, and at some point, something would have to give,” said Andy Walden, vice president of enterprise research and strategy at Black Knight.
“We’re now seeing exactly that, with July’s data providing clear evidence of a significant inflection point in the market,” he added. “Further price corrections are likely on the horizon as we move into what are typically more neutral seasonal months for the housing market.”
Did you see it? Probably not, because homes selling for 5.6% below comps would be about 10% under list.
Did you feel it? I’d say yes, it’s in the air. But sellers are very reluctant to go along, and the number of sales are the proof (half of last year). Having more actives listings sitting around not selling are suspicious, but if they don’t sell then we really don’t know for sure. Sellers will be much more likely to cancel their listing at this point, than reduce their price.
Are we going to hear more like this? You better believe it! Wait until Tuesday’s Case-Shiller!
What are you going to do about it? The only question that matters!
Obviously, the majority of buyers will be happy to wait longer, hoping this be the first of many drops. But for those who sense an opportunity, there will be an occasional deal – but you will have to earn it. Home sellers aren’t going to list their home for 5% to 10% below comps – they never have, and never will.
Those who stay in the game and make offers on several properties might be able to score a deal.