Ok got a little time before weekly SoCal economist call I follow every week. Two weeks ago I noticed the start of it on my NCC monitor but I always want to see a follow on for a few weeks because we have had plenty of false flags. IN the 3 submarkets I follow 2 are still roaring along but in one (NCC SFR) we are starting to bring on homes faster than they sell for the first time in about 2 years.
There’s plenty in escrow with much lower rates locked that will close in next 30 to 45 days. Then that takes another 30 to 60 days to get reported. We wont see any change in reported data until perhaps July.
There are two things coming at us also with opposite forces. Things always slow down mid April as its tax season. I think what Im seeing is more than that but its not out of the question that things pick up in a couple weeks. Which brings us to May. There is no stronger market here than May. Its the annual impact of relo buyers showing up in throngs to secure a new home to move into over the Summer while schools are out. Will this be muted by the higher rates? I think it has to be but how much is a complete unknown and if its enough to have any impact equally unkown. Unless we keep getting more and more inventory it will all go quickly.
Bottom line we are in a wait and see point as to what happens? Surely we have a slower market coming at us in the future. But if and how much that impacts pricing is a complete unknown right now. As always, I love my front row seat. I’ll be watching and reporting back.
I will also add that the mortgage market typically moves up quickly in big overshoot movements then settles back slowly. I think we needed to have higher rates but to have any real impact they need to stay high and for a longer time than guys like DZ think. I think the big jumps are past and while they could creep up a little more I dont expect rates to be much higher the rest of the year. Not saying its impossible but I just dont see 6% anytime soon. The movements we’ve had are enough to slow things down we just need them to stay here for a couple years.
Lastly nothing indicates large price declines anytime soon. There is ZERO chance we go back to prepandemic pricing and the betting window remains open
