Coldwell Banker Best Realty Clint Freeman– The Federal Reserve put a crimp on the housing market when it raised the prime rate, which in turn caused mortgage rates to shoot past 5 percent. Now we are floating in the mid-6 percent arena. Once in a lifetime 2.65 percent mortgage rates in the past year ushered in the strongest sellers market in our nation’s history. But now, as B.B. King sings, “The thrill is gone”. To put it straight, buyers had it “Oh, so sweet back then.” Now that the market is in a period of correction, buyers are asking should I even attempt to buy now, or just wait it out? Here are a few thoughts one might consider.
There is less competition. Gone are the days when buyers had to rush to be the first to view a home, and then make an instant decision about whether to purchase or not. “How much above the asking price should we offer?”, was commonly asked. Now that the fall season and cooler weather is upon us, buyers have a bit more time to think before they act. Presently, there is a very moderate number of site-built homes on the market to choose from, 93. Gradually, more homes are hitting the market daily. As a result, there is less stress and worry about getting into a bidding war.
Interest rates are up but… Yes, there has been a hike in interest rates, but put it all in perspective. Since 1971, the average mortgage interest rate over the past 51 years sits at 7.77%. There was a time in 1981 when interest rates shot up to 12%. I have met some homeowners that tell me they paid 16% interest back in the 80s. Yes, it is going to take more to get into the home of your dreams, but looking at the big picture, 6% rates are still below the historic average. Many top housing economists state they expect interest rates to float in the 6-percentile and slowly back off in early 2023.
Keeping a longer vision. If you have the mind to purchase, a good question to ponder is: “How long do I plan to stay in the home?” The mindset now is to think of a home as a place to live, and not just an object to make some instant money on. If you are considering staying put for more than five years in our beautiful City of Ridgecrest, purchasing rather than renting might just be the best option. Living comfortably in a place you can call your own, and with the ability to upgrade or alter a home to your liking is a huge plus.
Still a stable investment. Over the years the housing market has fluctuated, and it always will. But overall, house values still move upward. Now the trend is for home prices to dip, and it’s time to take advantage of that dip. Stocks and cryptocurrency wildly fluctuate, but in the end more than numbers to gaze at in an account, everyone needs a place to live and call home. Historically, homeownership is still the very best solid investment that anyone can ever make.
RIDGECREST FAST FACTS
To date there are 90 homes on the market ranging from $134,900 to $575,000.
Past three months’ price per square foot average of sold single-family homes: College Heights $215; NW $164: NE $157; SE $158; SW $173; RC Heights $176.
CALIFORNIA FAST FACTS
California median home price: $839,40; Lowest median home price: Lassen $199,000, Ridgecrest $269,000; Highest median home price by region: San Mateo: $1,950,000
(Source California Ass. of Realtors)