For most of 2023, the great real estate market was in a “rate-lock” situation… but that era is now over.
Let me unpack recent history for you:
On August 5th, 2021, the 30-yr fixed mortgage rate bottomed at 2.78%. Over the next 26 months, that rate rose and peaked on October 19, 2023, at 8.03%.
That was a meteoric 188% rise in just 2 years, 2 months. This mortgage rate rise paralyzed home buyers. Their buying power evaporated.
During the same time, property values rose making matters worse for homebuyers… and homeowners.
You see, many homeowners who bought during that time, bought because they loved the rate. But many did not love their home. And as time ticked away, they found themselves in a home they would otherwise not have bought if it wasn’t for the low rates.
So, homeowners were “rate-locked.” They wouldn’t sell their 3% mortgaged home, to buy another while rates rose… to 8%.
Until now.
The Great Real Estate Un-locking Event
In the last 60 days, mortgage rates are down from 8.03% to about 6.64%. That’s more than a 17% drop. Look:
At the same time – as regular readers know – here are some gifts that may keep giving:
* The Federal Reserve hinted of rate drops around late Q2 of 2024 as inflation is falling and nearing the desired 2% rate objective
* Inventory (in So. Florida) is up over 42% since August 1, 2023 (see below)
* Gas prices are falling (saving money)
* The Stock Market (S&P 500) is near all-time highs (making money)
* Home Price Index for most of Palm Beach County is at all-time high (equity rising)
At this time, homeowners, and potential home sellers, are eliminating reasons to remain “stuck” or locked, in their homes. One by one, they’re waking up to facts of today’s market and are listing their properties to sell.
And, homeowners are preparing to sell while this great real estate market and high price remain in play.
We are now witnessing the great real estate “un-locking” event that will last all of 2024.
If you’re a homeowner who aligns with this thinking – call me. We’re still entering the best time of the year to sell while demand is still strong. Even though demand is strong, many experts believe the median home price in the U.S. may remain flat in 2024. But if you’re waiting for the price of your home to rise even further, you have missed the great real estate price run-up – now is the time.
And for homebuyers, get your finances in order, now. The amount of properties for sale is growing by the day, while affordability improves with lowered mortgage rates.
There are many ways to define what a great real estate market looks like. Take a moment now and accept the fast that you stand at the moment of one of the greatest of all time.
Thank you for reading my weekly essays and sharing your feedback, opinions and comments – keep them coming.
Happy Holidays!
[today’s photo: Looking down on Old School Square for the Delray Beach Christmas Tree lighting two weeks ago = so great to see thousands attending]
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*** If you’ve yet to visit Delray Beach to understand why this place is becoming a top Florida destination and place to live, I just published my new video about Atlantic Avenue (and Pineapple Grove) you may find entertaining and useful
*** For a full list of Delray Beach events for December and early 2024, click here
*** I found a cool new restaurant I know you’ll enjoy Phat Boy Sushi Kitchen Bar
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The Great Real Estate Market Continues
*** Inventory is Rippin’ Higher – UP 42% in 128 days! ***
* Last week there were 38,139 available…
*** This morning’s Inventory is 38,921! ***
That’s an INCREASE of 782 Units in One Week!
OR… up 6,716 in 8 weeks!
Inventory is UP 15 weeks in a row
