Could we have a decent spring selling season next year?
Is there any precedent of our market settling down that quickly?
Home sales had been struggling for months, and then the Lehman Brothers collapse in September, 2008 helped to trigger the Great Recession, and millions of foreclosures and short sales.
Yet, just seven months later, home pricing hit the bottom in San Diego (see graph above).
We are enduring a once-in-a-lifetime spike in mortgage rates that are rightfully taking some time to digest. But people need to move, and by next spring, many will be buying and selling homes around here.
The Fed will have slowed down by then, the political landscape looks like it will drift more towards the center, and realtors are figuring it out that you have to have a spectacular-looking home with an attractive price to have a chance at selling. All will play a role in giving home buyers more confidence.
My listing from two weeks ago that generated 18 offers – 17 of them financed – and got bid up by 27% over the list price is proof that, in spite of the common perception that the market is dead, there is a strong demand right under the surface, just waiting for the right house, at the right price.
Those who were reading this blog in the 2008-2013 will remember how negative we were about the market, and how long it would take before it bottomed out – most figured it would be years and years. True, we aren’t going to get the government stimulus this time, but I don’t think we need it.
There will be a lot of skepticism in the market – and most people will wait until others go first before they think of entering the market themselves. We probably won’t ever see the sizzling frenzy conditions again, but a healthy semi-surge for a couple of months next spring seems like a good possibility. If it happens, it will be because sellers and agents got smart about selling in the post-frenzy era.
> “We are enduring a once-in-a-lifetime spike in mortgage rates that are rightfully taking some time to digest. But people need to move, and by next spring, many will be buying and selling homes around here.”
Not so fast.
https://www.macrotrends.net/2604/30-year-fixed-mortgage-rate-chart
We’ve seen this several times before. Late 70s, early 80s, mid 90s, late 90s.
That said. You are correct that situational/motivated moves will be the drivers rather than the recent opportunistic moving.
Well, ok twice in a lifetime for us old codgers (mid-90s was only +1%).
Everyone else reading this is feeling it for the first, and hopefully only time.
The Big Three:
10.45% March 1979
16.25% April 1980
5.8% increase in 14 months
just three months later……
12.18% July 1980
18.44% Oct 1981
6.26% increase in 15 months
2.8% July 2021
7.08% October 2022
4.28% increase in 15 months
Whose lifetime?
The mortgage rate when I bought my first house in 1983 was 13.5%. I paid some extra points upfront to buy down the rate for a couple of years, and after that ended up refinancing every two years or so until we sold it in 1997.