It’s November 2nd. That means there are only 59 days left in the year.
Does that freak anyone else out? Where the heck did the year go?
This week: it’s all about inventory.
Inventory hasn’t been this low since February.
|Oct. 22-28||Prev 4 Week Avg.||% Change||Oct. 15-21|
|New Pending Sales||770||763||0.88%||785|
|30 Year Fixed Mortgage||3.14%||3.04%||3.46%||3.09%|
This trend only seems to be picking up speed. Note: these charts show the most recent data to the left. Backwards, I know. Just keeping you on your toes.
I’m expecting that we’ll be setting new record lows for inventory in November and December.
Real estate is a “market” like any other. Ultimately, all the variables that influence a market roll up to two that matter most – supply and demand. If demand is greater than supply, prices increase. And vice versa.
In case you needed a reminder, this is what it looked like last year when demand picked back up after the holidays.
By the looks of it, we will have a lot less supply of homes for sale in the upcoming Q1 than we did this year.
Yes, rising rates and higher prices will impact (lower) demand over time, but it will also impact (lower) supply as well. Sellers will be more likely to hold on to their homes because if they sell they then have to go buy in a higher-priced, higher rate environment.
And don’t forget, we still have a HUGE wave of higher-earning millennials flooding the market to buy homes. And we also have a lot of higher-earning professionals from other (even more expensive) parts of the state and country moving into America’s Finest City.
I’m not saying I like it, but the stars are aligned once again for massive price gains in Q1 and Q2 again unless something big happens to disrupt demand.
In The News
- San Diego job outlook: ‘There is still a sizable hole in the labor market’
- Inflation is up, and so are wages.
- Encinitas revises it’s short-term rental regulations.
The Week Ahead
- It’s a jam-packed week. The Fed is meeting again, and we’re expecting a firm decision about the tapering of bond purchases. This really shouldn’t impact mortgage rates since the market has been expecting this for some time, but it’s big news nonetheless. We’ll also be looking out for more clues as to when the Fed will want to raise the benchmark rate. Inflation has been ALL over the news lately adding a lot of pressure for the Fed to act sooner rather than later.
- We’re also expecting the big monthly jobs report on Friday. The last two reports have been dismal compared to expectations.