I am glad to be posting back-to-back weekly blogs – albeit just barely.
From my viewpoint, our real estate business is as busy as ever. And, while I see a light at the end of the tunnel to gain time back for consistent blogs, podcasts, and quarterly mailers, our clients are still moving fast…and we are keeping up.
The blog and podcast will be back to its normal deep dive on local submarkets, along with big data that matters in the next week or two.
There are super-hot topics in the local South Bay real estate market along with the national news. A lot of these headlines are serious and should not be taken lightly. So, I plan to cover them in-depth.
Let’s summarize some of the hottest real estate topics with an easy-to-read list and then a quick summary, and I plan to explore these topics further in future blogs/podcasts.
And yes! I have a podcast – not all readers know that so please search for “The Richard Haynes Real Estate Show” wherever you get your podcasts. I have also linked all of my social channels at the end of this post for easier reference. New episodes will be up in the next month and some of the topics I will cover are as follows:
- Mortgage Interest Rates Surging Like Never Before
- The Shifting Winds of the Home Market; Are Sellers Losing Leverage?
- Impacts of a Lower California Affordability Index and Early May Data
Mortgage Interest Rates Surging
The wild interest rate run higher has caught many off-guard, including myself.
If you are a regular reader, you will know that in my “Fearless Predictions” for 2022, I estimated a surge in interest rates would fail to materialize. Could I have been more wrong? We are not even halfway through the year.
In less than 12 months, 30-year fixed mortgage rates have nearly doubled.
That has never happened in a such a short period of time since the St. Louis Fed has been keeping records in 1971.
In August, rates sat at 2.77%…earlier this month rates hit 5.3%. That is an insane 91.3% increase – nearly a double!
In February of 1977, rates sat at 8.65%…then jumped to 16.35% in March of 1980. That is an 89% increase but took THREE YEARS to materialize (not 10 months)!
This jump in interest rates, both the size and the speed, is unprecedented.
Also, more reason why in past blogs I have said that the Federal Reserve raising rates is not the sole driver of rates. Have you noticed Jerome Powell has only increased the Fed Funds rate by 0.50%, yet mortgage rates are up by 2.5%?
I could go on and on. And I will in upcoming blogs/podcasts.
Is the Home Market Beginning to Shift?
There is a lot to be said about this hot topic.
I believe there is merit to shifting winds, both anecdotally speaking to other agents and in some of the data. In fact, I believe we are seeing shifting forces in specific pockets here in our South Bay home markets.
Some neighborhoods are still on fire, while others are in fact changing ever so slightly.
While a slight shift might be coming to buyers, we are still a very long way from having the inventory to give buyers much leverage.
This is an important topic, but not nearly as big as rising rates or the next section below.
Low Affordability and Early Q2 Numbers
Due to my failed interest rate prediction, it looks like my steady home affordability prediction will get knocked off as well.
The rise in interest rates is beginning to have its effect nationally and it is likely coming to California and our local South Bay home market.
I plan to dive into the May numbers and partial Q2 numbers to give you an early understanding of how rates/affordability are affecting the market in real time. I might also give it a try to calculate a partial affordability number too.
All in all, this is a big deal and something for you to watch/study.
If affordability gets to 22 or even 21 next quarter, something will likely have to give. That would be interest rates subsiding or home prices finally leveling off.
Upcoming Podcasts & Topics
I have delayed new episodes to the podcast for far too long! Many people never read the blog and always listen to the podcast, and vice versa of course.
That said, the podcast allows me to really dig into past topics, share anecdotal perspectives, and pump out more information quickly than the written word.
- The lowering California Affordability Index number, my thoughts, and forecast.
- Addressing surging interest rates, how to navigate them, and its risks/opportunities to our South Bay home market.
- And of course, I will pour through the early May numbers and address the ever so slight shifting winds.
Please do not hesitate to send me topics – it is very easy for us to get into items verbally as if we were on a phone call. Email or DM me!
Conclusion & Listings
There is going to be so much to cover in the coming weeks that I am fired up!
I will also try to not just include the bigger topics and data that are dominating the home market right now, but also work to get back into some of the submarket happenings in the South Bay.
Stay tuned for the next few blogs and podcasts – I hope you like them.
Finally, I have been fortunate enough to list three homes in the past month and all three went to escrow in less than 10 days, which, for my avid readers, is the reason the blogs have unfortunately been delayed for the last few weeks.
- 925 9th Street in Hermosa Beach
- 25915 Chalmette Lane in Rolling Hills Estates
- 22 Montecillo Drive in Rolling Hills Estates
We are taking a breather this weekend, but are preparing a Lunada Bay single-family home and a Manhattan Beach townhome for sale.
I encourage all of my sellers to list their homes on the MLS, but if you have serious interest in these areas and property types, then please do not hesitate to reach out as our clients might consider offers now due to special circumstances.
Have a great weekend!