These must be the dog days of summer with this heat. But before you know it August will be here and kids will be going back to school. The real estate market here never really saw the normal spring and summer rush to buy homes. Reality just seemed to step in.
Mortgage rates have been rising all year. As inflation slows, the rates dropped a tad this past week—0.18 percent, according to Fannie Mae. Still the 30 year fixed rate mortgage now stands at 6.78 percent, and this is up 1.24 percent over a year ago. Nationally and statewide, home sales are down. The problem remains lack of inventory. And when you think about it, it’s pretty easy to understand. If I bought a home a few years ago and have a 3 or 4 percent fixed rate mortgage, I would think twice about moving if I now have to pay perhaps twice the rate. Fewer existing homes coming on the market has given an edge to homebuilders.
As the California Association of Realtors points out in its June report, existing single family home sales were down little over 4 percent from May and nearly 20 percent from a year ago. Sales in Contra Costa County were down as well, dropping 7.5 percent from May and 18 percent from a year ago.
With mortgage rates expected to be high in the next couple of months, California may not see any meaningful improvement in its housing inventory for the rest of the third quarter.
Home prices are another story. The median sold price of single-family home in the Contra Costa County in June was $925,000, up nearly 5 percent from May and about the same as a year ago. Here are a couple of examples of what’s going on locally. In the last 30 days the average sold price of a home in Lafayette was nearly $2.4 million, down six percent from an average of the past three months. But the average sale price was five percent over list. In Walnut Creek the average sale price was $1.82 million up nine percent—with the average close to six percent higher than the asking price.
What does all this mean? For a seller, prepare your property carefully and price it well. For a buyer? Make sure you are approved for a mortgage before you even start looking. The market remains competitive.