Came across this very interesting & informative article by Clare Trapasso earlier this month, and feel impelled to share:
Homebuyers who are closely watching the correction in the real estate market might believe now is a good time to pounce. After all, homes are sitting on the market for longer, those maddening bidding wars have dried up, and wild offers over the asking price are things of the past, right?
Well, not exactly. It all depends on what they’re hoping to purchase.
Those searching for a home are seeing plenty of fixer-uppers, homes lacking curb appeal, and those in less desirable areas sitting on the market for longer and undergoing price reductions. But well-appointed, well-situated turnkey homes are still selling fast, often receiving multiple offers, and even selling over the asking price. It’s as if the housing slowdown hasn’t affected these properties much at all.
“If it’s a good home in the resale market, it’s selling quickly,” says Ali Wolf, chief economist of the building consultancy Zonda. “The buyer who is buying today is not the same buyer buying 12 months ago. If [they’re] paying this much, it needs to be a nice home.”
Competition for turnkey homes in good school districts remains fierce.
“If the house is perfect, the odds of someone else wanting it are high, too,” says Geena Peoples, an Austin, TX–based real estate agent with The Juice Group at Compass.
Home prices are still much higher than they were before the COVID-19 pandemic. And while mortgage rates have fallen a bit of late, they’re still substantially higher than they were at this time last year, jumping to just over 6% for 30-year fixed-rate loans, according to Freddie Mac. So, buyers don’t have much room in their budget for costly repairs.
“In a market where costs are still high and buyers can be a little choosier, it makes sense they’re going to really zero in on the homes that are the most appealing,” says Realtor.com® Chief Economist Danielle Hale.
During the pandemic, just about everything was selling for more money than ever before because homebuyers didn’t have much to choose from. Even fixer-uppers in the right markets were hot commodities. Buyers and investors could snap up these properties and still be able to afford the work they needed.
“Back in 2021, you could list just about anything and there would be a line out the door,” says Peoples. She used to see dated homes with cracks in the foundation and the walls on the market, and buyers would still pounce on them. But those days seem to have ended, at least for now.
There you go, some information to consider when advising your Home Buyers and Borrowers on what’s the best move for them to get a new home loan to buy or to refinance, throughout California!