How are interest rates affecting the real estate market?
Welcome to the market update corner. The real estate market has made a 180 degree turn in the last 30 days. Interest rates for a 30-year fixed mortgage have increased from an average of 3% in March to an average of 5% in April. This sudden, yes sudden, increase in interest rates has impacted many buyers’ monthly payments greatly. An increase of 2% means an increase of $1,000 a month on a $1,000,000 purchase price and for a primary residence. Interest rates for an investment property have increased at the same rate which leaves many investors pumping the brakes on their purchases in anticipation of price decreases.
The market has cooled down in the month of April. It’s still not balanced because of the low inventory but it’s only a matter of time.
In the last few weeks, the market has achieved a relative stasis point in terms of sales to inventory. However, inventory is sufficiently low to keep us in the Seller’s Market zone. It’s worth noting that since April 15th we have noticed that 40% of the listing suffered a price reduction before they were sold.
How is this affecting the Coronado market?
We currently have 12 single family homes for sale in Coronado, and 10 in pending status and 13 sold in April. We also have 15 attached homes for sale and 12 are pending and 9 sold in April.The market in the rest of the county reflects the same sentiment. We continue to have a lot of traffic during open houses, but some buyers are reluctant to place offers. I will continue to monitor the price decreases, days on the market and most importantly the change in the 10-year and 30-year interest for mortgages.
For a more in-depth analysis of your investment please call Raquel Fernandez, Broker associate at Coronado Shores Co at 619-453-4513 or visit my website at www.CoronadoShoresRealtor.com