This past weekend we experienced powerful winds throughout Southern California. Enormous trees toppled and sidewalks were ripped up. Many homes lost power and some experienced damage — on a small or big level. Palm fronds littered backyards and it was a reminder of how strong and terrifying nature can be.
Here is a photo of a fallen tree by Damien High School in La Verne:
We are chugging along through January and summarizing the housing market in telegraph style would look like this: low inventory, higher rates, strong demand.
Mortgage rates have been ticking up and C.A.R. reported that, “The average 30-year fixed rate mortgage reported weekly by Freddie Mac jumped to the highest level since March 2020 in the second week of 2022, and the daily average tracked by Mortgage News Daily suggest that further increase will follow in the coming week”.*
Will higher mortgage rates temper home buyer demand? Time will tell, but mortgage applications were up the first week of the year compared to the previous week. Maybe part of the mortgage applications can be attributed to the 2022 Goal Setting of eager home buyers who are determined to make this year the year they become home buyers.
As always, as home prices and inflation both increase, headlines start to ask whether we are in a housing bubble or whether this price growth is unsustainable. Interestingly enough, the data company ATTOM reported that “Foreclosure activity last year was at the lowest level since the company began tracking it 17 years ago”.*
We track inventory in the local cities. Inventory levels affect home buyers and home sellers alike.
Zillow reported that December 2021 inventory was down 40 percent from December 2019 before the coronavirus pandemic.**
When there are only 12 homes for sale in La Verne which is a city with a population of roughly 31,000 people, it puts the housing supply shortage in perspective. Rancho Cucamonga, with a population of roughly 176,000 had only 46 homes for sale.
One thing that might cause an increase in the number of homes for sale is when homeowners realize that this opportunity to sell and receive multiple offers and get over list price won’t last forever. The market will normalize as more properties come to market and inventory increases. The Fear of Missing Out or “FOMO” of homeowners is a motivating factor. Your neighbor just sold and moved out of state, you saw how much their home sold for, and you start to get curious about what your home is worth?
We talk with homeowners way before we sign a listing contract with them. Let’s start the conversation even if you have a 1-2 year plan of where you want to be.
Our contact information is 626-609-2130 or email us at info@kaleorealestate.com
