2020 has given us a Pandemic, a few hurricanes and the craziest Housing Market we have seen since 2003-2005. Currently, there are more buyers than homes for sale which is driving the prices up. How much? So far home prices are 7% higher than this same time last year. Here in the Conejo Valley situated just north of Los Angeles is seeing good homes selling in a week and great houses selling in a weekend. Yes even during the pandemic and not just the $700k to $800k homes, we are seeing this in the $1.5mil - $2mil range as well.
So what's driving this 2020 Real Estate Housing Market? Well, most of the population is now working from home and children are distance learning, so families now need more space in their homes. Most of the latest sales we have seeing are families moving from the city and to the suburbs looking for homes with spaces for a home classroom and office. We have also seen most buyers jump on the homes with amazing outdoor living spaces. This drive of home buying is creating a buying frenzy just like the early 2000's.
Another factor for this surge is that Mortgage Interest Rates have dropped significantly since the beginning of 2020. Most buyers are being quoted 2.8% and lower right now on a 30 year fixed mortgage. Also, with the lower interest rate it is allowing buyers to either buy a higher priced house, or buy with a much cheaper monthly payment. For example, a $800,000 house with 20% down ($160,000) is a $640,000 mortgage which 3 months ago at 3.75% was $2,963.94, and now at today's rate of 2.8% your monthly payment will be $2,629.72 saving you over $300 a month.
So now you must be wondering how much house you can afford? Well we have a motto that is "Live in your home and not for your home". There is an amazing article from Money.com that breaks down this question of how much home can you afford to purchase. Check out the article here - https://money.com/how-much-house-can-i-afford/
If rates continue dropping to 2.5% or lower, we could have a surge of sales during the 4th quarter raising values even faster. If you are shopping for a home and thinking, "I'll wait for the market to crash and then buy" well get ready to sit out for at least another 5-6 years. The Federal Reserve stated they want to see 2% inflation while keeping the rates at historical all time lows.
What does this mean to you? Banks can trade money at a cheaper price and the savings are passed onto the consumer. So if your mortgage rate is higher than 3.5% or you need another bedroom, office or mini classroom, then contact us today to discuss your goals.
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