Buyers are running up against a shortage of properties for sale so far again this year. Sales are about 35% slower than 2021, but they simply can’t buy something that doesn’t exist. The market just isn’t being flooded with homes that would help drive prices down as mortgage rates have increased. Banks are Capital-rich and aren’t under pressure like they were in the previous real estate correction of 2008. Serious delinquency rates that can lead to foreclosures are less than 0.7% of all mortgages. And household debt payment burdens are near historic lows. 85% of area homeowners are enjoying mortgage loans under 3.875%. Unemployment is being measured at the lowest rate in over 50 years. All of this allows homeowners to easily hang on to their current homes. Homes for sale today are limited to traditional reasons: job transfer, retirement, divorce, move up to a larger home, or a move to the dream location they can now afford.
Let’s talk about Cypress, California. In 2021 there were 497 homes sold in Cypress – close to the 30 year average of 520 per year. In 2022, the number of sales dropped to 322 in Cypress – near the lowest turnover in the past 50 years. Through June of 2023, Cypress home sales are on track to be around 250 for the year – less than half of a standard annual sales. This includes all condos, townhomes, and houses. This continued lack of housing inventory is supporting home values. Today, there are only 28 homes listed for sale in Cypress – 50% off the July average over the past 30 years.
If mortgage rates dip below 5%, a psychological watermark for many homebuyers, then more owners with low mortgage rates would feel comfortable giving up their current loan – and likely put their homes up for sale to make a move. And lower rates also boost the buying power for buyers. For every 1% drop in the interest rate, a buyer can afford to borrow 10% more on their home loan – about $75,000 more in the current market. If mortgage rates soften, that’s going excite more buyers to move forward with their home purchase – and more sellers to trade into their next home.
Why mortgage rates have recently edged up slightly
Today, the average 30 year fixed rate mortgage is near 7%. One of the main drivers of the mortgage rate increase was the U.S. Federal Reserve. The Fed has been hiking its own rates to slow down the economy in an effort to lower inflation. And investors now believe the Fed will continue to move up their rates for longer than originally anticipated – due to the better-than-expected unemployment report indicating the economy remains strong. It’s possible the market may see a bump up in mortgage rates over the next few months. The Fed has been clear they want to see slowing in the housing market. It will be interesting to see if the number of homes for sale increases in Orange County like it has in other major markets. So far, Orange County inventory of homes for sale is averaging about 50% of normal for this time of year. This low inventory of homes is supporting prices by maintaining the balance between buyer demand and supply.
If you are considering a move in 2023, give me a call. I can share the latest information on the current real estate market, and we can review the best options for you.
Working with an experienced real estate agent is critical in this market to insure you receive the most profit when selling. We have personally sold over 1,000 homes in Cypress, and know every neighborhood well. That’s experience you can trust. We can provide the latest information to insure you receive the highest price for your home. Call me direct at: 800-944-2441, or email me at: Cary@Cary4Homes.com. And of course, all of our conversations are confidential. Let’s talk soon.
And Now Receive Even More Profit with my “Free Loan” to update your home when selling:
Cary Concierge Service
I will personally Front the Cost to prepare Your Home for market to insure you receive the Highest Price
This includes, Staging, Repairs, and Cosmetic Improvements
No Hidden Loan Fees – No Interest Charged – Ever
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We currently have buyers looking to purchase a Cypress home.
Call Cary direct at 800-944-2441 or email: Cary@Cary4Homes.com. We can review your best options to insure you receive the most profit when selling.
The call – just like our concierge loan service – costs you nothing. And of course our conversations are always confidential. Let’s talk soon.
Cary Hairabedian & Valerie Cruz
Remax College Park Realty
Direct: 800-944-2441
Email: Cary@Cary4Homes.com
Website: www.Cary4Homes.com
Cary’s DRE: #00876519
Valerie’s DRE #01726223
Experience you can trust:
Real Estate licensed in California since 1984
Over $28 Million in home sales in 2022
Over $750 Million in career real estate sales
#13 of 6,100 Remax agents in California 2019
#42 of 62,000 Remax agents Nationwide in 2019
#99 of 130,000 Remax agents in the World in 2019
Cary’s Awards
Remax College Park Realty’s #1 agent: 1998, 1999, 2002, 2003, 2010, 2012, 2013, 2016, 2018, and 2019
20 time Remax International Platinum and Chairman’s award recipient