I looked on the Multiple Listing Service, the MLS, and it said there were 23 new listings posted in the last 24 hours. And it was like, oh my gosh, it was so exciting, a big list populated, and I was like, “Oh boy.” Now not a lot of it would really fit what my buyers are looking for, but it was really exciting to think, oh we’re starting to get some traction. We’re starting to get some movement. Listings are starting to come on. The bad news is not so great. The interest rate rates are going up. As of March 22nd, 2022, conforming 30-year fixed rate is 4.75. Ouch. The conforming 15 year fixed, 3.875, which is really decent. And then the jumbo. Jumbo, remember that’s above the conforming limit and it’s a totally different loan product. Those rates are decent. 30 year fixed is 4.375. So the more you borrow, the less the rate is. Higher interest rates don’t always mean that you’re going to get an edge in the market, there are thoughts prices are going to go down and buyers are going to go away. Unfortunately, we have such a pent-up demand there are so many people out there still trying to buy houses that the demand is just continual people who lost out last year trying again, then there are new buyers coming into the market today. The full market report March Market Update.
People talk about and hope for a slow down. What I imagine is prices may not go over list as high, yet there will still be multiple offers. So for instance, if a property last year with those lower interest rates was listed at 1.4 and it went for 1.8 and they had 10 offers, this year, I’m just throwing this out there. I have no anecdotal proof of this. Maybe later this year you have a house listed at 1.4 and you have 10 offers. You may see it only get up to 1.6. It’s not going to lessen the demand and that list price is still going to be over. The list price is still going to be bumped up by multiple offers. It may just not be bumped up as much.
I’ve been through a lot of markets before. I remember one-time years ago, I think it was 2006, I sat at the office computer trying to put together a tour for a buyer and there were so many listings, I couldn’t choose. I mean, they told me what they wanted, but there was just so much to show them, I didn’t know what to do. What I used to do when we had that many listings is, I’d have the buyer sit with me and I would show them the list and ask “Do you like this? Do you want to go check this out?” We could not see them all.
For broker tour (realtor open house), we couldn’t even see all the houses. Our broker tour is 9:30 to noon in the mornings, that’s typically the one I go on because it meets most of the areas I work in. Today we meet, my colleagues and I, at 10:00, and often we are done by 11:30. Past years we used to start at 9:15, we couldn’t start at 9:30. We didn’t have enough time for that. We had to make sure we were there at the door at 9:30 and then a lot of agents would hold their house open until 12:30. We would just be out there for hours. So, that part has changed. I can only hope I can get a full tour in again. That would be lovely.
We do have a market that’s starting to open up a little bit. You are going to see more listings. I know it. My broker says he’s signing lots of listing agreements. I have multiple listings sitting, waiting to get going, but because of their situation, they’re not ready to go yet. I think I’ve mentioned those before. I think there’s a lot of pent-up things going on. I hope so. Now why? I mean, not just so I can sell stuff. But when I talk to people, they just get disappointed, especially buyers. There is not much to see and the competition is stiff. And part of the whole process of helping them find the right thing is showing them lots of houses.
If you’re open-minded as a buyer, you’re probably going to be okay because there’s always something out there. I’m still selling houses, so I know there’s still stuff out there. And if you’re listing, I wouldn’t worry too much about the increase in interest rates. You might see a little edge off your price, but you’re still going to do very well. Our market still has a lot of demand. And if you do work on your property and you get it ready to sell and you create some excitement or you hire an agent who creates excitement, that way you will probably still get a very good price. What we’re probably starting to see is hovering back around 2018, 2019. That was still a really great market. You would see about five to six offers on a property and you would see one that would be listed at about 1.1 go for maybe under a little 1.3.
At the time, we didn’t realize it. It seemed like a crazy market, but we didn’t realize that was a much saner market than we were going to enter in when the interest rates got pretty much artificially lowered and created this huge influx. That’s my take on the market. Now that’s only for Santa Cruz County. If you want to hear any more of my very opinionated takes on real estate, I suggest you subscribe and you will hear something from me weekly or check out The Realtor Lady. I have lots of good content on there about Santa Cruz and real estate.
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