🤔 What should you expect from 2023’s real estate market?
And what promising signs am I seeing firsthand as the year kicks off?
Hi, it’s Eva Lin, #1 Agent for Pasadena Home Sales in 2021 and 2022.
Usually, I share about the nuances of our local real estate market, but today…
…I want to zoom out and cover the market more broadly.
The first thing we should discuss is interest rates.
🤯 As you likely know, interest rates doubled last year.
This caused a major market slow down both nationally and locally.
But, over the last few months, rates have fallen off their peak and stabilized somewhat.
To dive deeper we should look at the difference between the 10-year treasury rate…
…and the 30-year mortgage rate.
⚠️ The bigger the gap between those two rates, the more panic and volatility exists in the market.
Throughout the first half of last year, we saw the gap start to widen.
And then, in June, the Fed came out and said:
(1) “We don’t have the economy under control,” and
(2) “We need to reset the housing market.”
That’s when the market began to experience a dramatic shift.
📉 Throughout the summer and fall, house prices dropped and home buyers stepped back.
But, as the year ended, the message from the Fed was…
…“Maybe the peak of inflation is behind us.”
And, as a result, the gap between the 30-year mortgage rate and the 10-year treasury rate has shrunk over the last 2 months.
This indicates more confidence and a stronger housing market than was the case in the fall.
👍 I’m also seeing this firsthand in my own business.
As an example, last week I listed a home for sale at 1234 Rock View Street in Eagle Rock.
Even with the downpour we had over the weekend…
…over 200 home buyers came to the Open Houses.
What’s more, my clients have already received multiple strong offers over the list price of $2.2M.
To be sure, this result is due to a number of factors:
✅ One, it’s a great house
✅ Two, the marketing we put together for the house is truly unparalleled and showcased the home in its full glory (see it here)
✅ Three, buyer confidence has significantly improved recently.
All these factors are coming together to create a great outcome for my clients.
I’m not going to make any bold predictions about how the economy and the real estate market will unfold this year.
What’s clear, though, is last year’s scary news headlines about the market collapsing haven’t come to pass.
And as far as 2023 home prices go…
…highly reputable pundits and experts have differing opinions.
📈 The most bullish are predicting a 5% gain.
The most bearish are predicting a 5% drop.
The important thing to note is, as of right now, talks of a major market downturn are off the table.
Next month we’ll dive into the data here in Pasadena and the surrounding cities, but for now…
…I hope this helps you understand where the market is at as we enter the new year!