It seems like the Chula Vista real estate market is always changing and evolving. The past few years have been especially unique in light of the COVID-19 pandemic and how it affected the housing market and the national economy as a whole. If you’re thinking about buying or selling a home sometime this year, you may have questions about how the market currently stands and how it might impact the decisions that you make as you work to complete your transaction. Current homeowners may want to know more about how changes in the market impact the values of their properties. You’ll find answers to your most pressing questions as you read this article. If you still have questions after reading, reach out to Manuel Sanchez, and he will be happy to assist you.
How Does the Market Currently Stand?
Right now, home prices are down slightly from where they were one year ago, but the market remains fairly competitive. Most homes sell in two to four weeks after going on the market. Many homes will receive multiple offers with waived contingencies, and it’s common for homes to sell for a final amount above the seller’s original asking price. This means that you’re unlikely to have much luck as a buyer if you make an initial offer below the seller’s asking price. They will likely prefer to wait for an offer that comes closer to meeting their demands.
Why Have Sales Prices Come Down?
The main reason why prices are down in most markets across the country has to do with rising interest rates and a higher cost of living. Interest rates dropped to staggeringly low levels in the days and weeks after the initial onset of the COVID-19 pandemic. Many buyers jumped at the opportunity to purchase a new home and secure a lower monthly payment. Things are much different now than they were nearly three years ago. Interest rates are considerably higher than average, and it remains unclear when rates might come down. The Federal Reserve has hinted that they could lower rates sometime during 2024, but it probably won’t happen before inflation gets under control. The higher inflation rates are the primary contributing factor to a rising cost of living that many prospective home buyers are struggling to keep up with. It’s hard for many people to think about buying a home while also dealing with these economic challenges.
Will This Have Long-term Effects on the Health of the Housing Market?
Probably not. Rates have a history of coming down to past averages, even after prolonged seasons when they were higher than normal. There’s also reason to believe that the market remains in a strong position despite the issues most people are facing. Many industry leaders believe the mortgage delinquency rate is a key statistic that shines greater light on the health and stability of the market. A higher mortgage delinquency rate would suggest that the market is in greater trouble, but the current rate is lower than it’s been in some time. In addition, a recent study shows that home prices have outpaced inflation over the past 100 years by nearly three percent. This is noteworthy, especially when you consider the serious economic challenges that have presented themselves over the last hundred years. Events such as the Great Depression of the 1930s and the housing market crash of 2008 were unable to fully derail the housing market. The market has shown resilience in the past and should continue to do so in the future. In the meantime, people still have to buy homes because of life changes or job relocation. Not everyone has the luxury of waiting for rates to come down before they begin shopping.
How Much Does the Market Change Throughout the Year?
Normally homes sell for higher prices in the late spring and early summer. Demand is higher during these months because of the return of tax refunds and the end of the school year. Activity stays strong through August before cooling down in September and trailing off significantly in October and November. It’s normal for average sales prices to drop along with the temperatures as fall comes around and winter approaches.
What Are the Current Foreclosure Rates?
California’s foreclosure rate is currently the 14th highest of any state in the nation. This represents a heavy increase from 2021, but it’s important to keep in mind that foreclosures were put on hold under many circumstances by temporary measures put into place to help homeowners who were suffering from economic hardship as a result of the COVID-19 pandemic. Home prices in California also tend to be tens of thousands of dollars higher than the national average.
Will 2023 Be Better for Buyers or Sellers?
2023 isn’t shaping up to be an obvious buyer’s or seller’s market. Both sides could benefit from entering the market in the coming year. Buyers will benefit from sales prices that are down slightly. They may have to take out loans with higher interest rates, but they will maintain the ability to refinance their loans later on if it makes sense to do so. In the meantime, they will be able to start building equity in their home earlier than if they had waited. Sellers will still have the chance to capitalize on average sales prices that are much higher than they were a few years ago. They will still command significant interest when they put their home up for sale in a competitive market like Chula Vista.
Who Can Help Me Buy or Sell a Home in 2023?
Manuel Sanchez works hard to stay current on current trends and happenings in the Chula Vista real estate market. His knowledge and expertise set him apart from the competition and better position him to help his clients shop for Chula Vista homes for sale. Reach out to Manuel when you’re thinking about buying or selling a home in the San Diego area. He will work tirelessly to help you reach your goals.
