A Micro Look At A Macro Market

Today there is only one home for sale in Rockpointe. Typically there would be between 4 to 8 units offered for sale this time of year. What we are experiencing in Rockpointe is what most of Southern California is experiencing. And that is a definitive lack of inventory. On the plus side this is certain to continue to drive prices upwards. But the caveat for this is that there are a couple of wildcards that could set our price point on a path of reduction. The first is that today we have interest rates somewhere in the neighborhood of 4.5% for a 30 year fixed mortgage. Historically that number is about 8.5%. And for every point that that interest rates rise (and they certainly will) our potential buyers lose about $40K of buying power. This coupled with our relatively high HOA cost could make these homes unaffordable to our first time buyers, investors, and our move down buyers which are a major part of our primary target market. The other wildcard that could impact us is inventory. Right now as I said we have little to offer for sale. This translates to no competition between sellers which means that buyers have to compete for the few homes offered for sale. This is great if you are selling. If inventories were higher sellers would not have the leverage that they enjoy today. If I were in the market to sell, today would be the best day to do so for the reasons I have just stated. Others will tell you time the market. This is shear folly. No one can time the market. When it happens it is luck not skill. The best time to sell is before the peak when competition is low and sellers control their market. If you would like more information on our current market trends please feel free to contact me at FSpencer10@gmail.com


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