REAL ESTATE UPDATE
Now that we are firmly into the 4th Quarter of 2021, I thought it was a good time to look at our market currently and the experts’ predictions for the future. Let’s look at two excellent sources for their estimates:
- Fannie Mae, Freddie Mac: These two government-sponsored enterprises, providers of most of the conventional loans made in the Country, predict a continuing high level of consumer demand. They estimate that annual appreciation in value will grow about 17% in 2021 and continue to increase by 7% in 2022. They also predict an increase in interest rates from about 3% to 3.5% (keep in mind a 0.5% increase in interest rates on a $500,000 loan increases the payment on that loan by $145.00/mth)
- California Association of Realtors: CAR predicts very similar numbers for the remainder of 2021 and through 2022. Prices are projected to average close to 20% in 2021, and approximately 5% in 2022. They also see a minor increase in interest rates of approximately 0.5% for 2022.
So, what does this mean to you and your family. Well, if you are a buyer, particularly a first=time buyer, NOW is the time to make that purchase. Keep in mind that if you wait until next year, not only will you see an increase in interest rates (see #1 above), but a 0.5% in sales price will add another $100.00 or more to your monthly payment, and you will pay 5% more for the home, losing significant equity.
Sellers have an easier decision, since it appears that their homes will be worth more. However, most sellers are also buyers, so the increase in value and interest rates can lead to a loss if you wait to sell. Add in the fact that this very strong market offers sellers substantial control over their sale, such as “as-is” condition, possible rentbacks, etc., indicates this is very good time to sell-maybe the best we’ve seen!
Call us, 949-500-6365, email Frank@FrankDiLauro.com, or reach us through our website www.FrankDiLauro.com for all your real estate questions or needs.
