“Realtors would probably all agree that our market is a little bit slower than it’s been,” President of the California Desert Association of Realtors, Stephanie Taylor, shared.
Home sales are falling as mortgage rates soar.
According to the National Association Of Realtors, signed contracts to purchase homes dropped a startling 20% in June compared to a year ago.
Even pending home sales fell 8.6% last month, which was much more than expected.
“We’ve become accustomed almost in one year to a little bit more of a crazy market,” Taylor explained. “I think now that we’re backing off a little bit and becoming more normalized, it seems like a bit of a shock.”
Taylor got her license in 2007, right before the recession.
She says while sales have slowed, inventory is going up.
She says that is much different compared to 2008.
“I got to see what happens when the bubble bursts,” Taylor continued. “Even though there’s a little bit of fear with the interest rates and the economy and recession talk and that type of thing, back then, we really saw pressure on housing. This time, we’re not seeing that kind of pressure. People are still buying, people are still selling, and it’s a healthy type of market.”
But buyers are taking more time to purchase than they were before which is causing homes to stay longer on the market.
“It will definitely affect the amount of home that they can buy. So someone who may have been looking at a higher price point may now be looking at a lower price point,” she said.
So, what should people know before they buy or sell?
“It’s still a good time to sell. You haven’t missed the boat,” Taylor explained. “There are still buyers out there and your home is going to sell if it’s priced right. It just may take a little bit longer than it would have. For buyers, my advice would be don’t let the interest rate scare you off. We still have interest rates today that are low compared to where they were many years ago. So, the price of the home that you’re able to get may have to change, but you’re gonna have increased inventory and more homes to choose from. So, that’s a positive thing.”
The National Association of Realtors is forecasting total sales for this year will be down by 13%.
Depending on mortgage rate levels, sales should start to rise by 2023.