THE FRIDAY 1/13/23

Posted by David Leonard on Friday, January 13, 2023 at 11:34:57 AM By David Leonard / January 13, 2023 Comment

THE FRIDAY

Hi!

Well, this is entirely anecdotal, and I'm an optimist at heart, but we are beginning to see a small, but important turnaround in the market. My phone has been ringing and every agent I've talked says the same thing.

We've always said that interest rates are not the issue - people have bought homes when interest rates were much higher. Volatility is the issue. No one wants to buy when they think next year will be cheaper (it won't - see Save $84,000 via Concessions below) or when there is unsurety about the economy.

So, let's put your mind at ease a bit. It looks like:

Inflation will be tamed this year.
Interest rate rises will be stopped soon (see Mortgage Rates Decline Again below)
There will likely be a small recession that is neither deep nor wide - think 1991. What happens to home prices in recessions? See What Happens to Housing When There's a Recession below.

Mortgage Rates Decline Again

If you've been following mortgage interest rates of late, it's been a bumpy night. Up one week, down the next, then up again. Overall, however, it goes down further on the downswings than it does on the upswings providing a net downward trend.

What Happens to Housing When There's a Recession

It seems everybody who is anybody thinks we will have a small recession sometime this year. We know, you're thinking that homes will sell for $80 then. Actually, it's just the opposite...

LET'S TALK ABOUT IT

Save $84,000 via Concessions

From Forbes:

Concessions have made a comeback as rising mortgage rates, inflation and economic uncertainty have dampened home-buying demand, giving the buyers who remain in the market increased negotiating power.

That’s a stark shift from the pandemic home-buying frenzy of late 2020 and 2021, when record-low mortgage rates fueled fierce competition, forcing most buyers to bid over the asking price and waive every contingency just to have their offers taken seriously.

PRICE REDUCED PROPERTIES

SAN FRANCISCO

NORTH BAY

PENINSULA & SOUTH BAY

EAST BAY

Maximum Seller Concessions & Rate Buydowns

Seller concessions are now the thing! Before the market turns, it is likely that you can get a rate buydown from seller. But, as always, there is. bit of a catch. There are maximums that most conventional loan programs will allow the seller to concede on any sale. Primarily they have to be centered around closing costs (they can't just be a gift because they like you - they can lower the price if that's the deal). Rate buydowns are the most popular concession currently.