Starting in late Spring and continuing through the Summer we have seen signs of the market beginning to soften for certain properties in Lamorinda.
While we often monitor the output of real estate markets with average price and price per square foot metrics it is also useful to monitor the health of the Bay Area economy to better predict future performance. The Bay Area Council Economic Institute and McKinsey & Company just released the 10th edition of their Bay Area Economic Profile.
Recently our clients have asked us more and more “Where are we in the current real estate cycle and do you foresee a correction in the near-future.” This question is a valid considering the strong market that has persisted for years, rising interest rates and the new GOP Tax Plan that reduced deductions for real estate taxes and mortgage interest.
The benchmark 30-year fixed-rate mortgage rose this week to 4.52 percent, according to Bankrate’s weekly survey of large lenders. Rates have increased almost half a percentage point since the beginning of the year and have risen for seven consecutive weeks. 30-year fixed rates are at the highest point since April 2014, when the average rate was 4.54 percent.
The end of the year is such a busy time, we hope you and your family had a moment to come
up for air and enjoy ringing in the New Year. Over the holidays inventory is traditionally low. No one wants to be bothered to show their home when family and friends are visiting and when there are so many other distractions. More importantly buyers are often out of town, waiting for their year-end bonus and the New Year to begin to start their home search. Despite the traditional holiday lull, December delivered some record high sales which we believe can be partially attributed to buyers and sellers scrambling to sell or buy before the new tax bill was enacted.
Despite the hustle and bustle of the holiday season, now is the perfect time to start laying the groundwork for a successful 2018 sale. This is especially true in Lamorinda where the “spring” market has gotten progressively earlier; school enrollment begins in the early spring which means many buyers are looking to close on their new home even earlier in the year to ensure that their child is able to attend neighborhood schools. It is more important than ever to start making your to-do list now if you want to take advantage of this typically strong early selling market.