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Everyone who thought they should wait out 2021 to see if prices went down in 2022 are frustrated and disappointed to see that interest rates have jumped, quickly and significantly but home prices are holding steady.
One silver lining is that the crazy bidding wars should be mitigated by many folks being priced out of their previous budgets, so although housing prices are still rising, with fewer people in your tax bracket able to afford a house, you'll see less competition, hopefully less need for extreme seller concessions, and a maybe, just maybe a little bit more power in the hands of buyers still able to afford the median prices of Los Angeles real estate. It's important to note that while higher, rates hovering around 5% are still historically on the low end, in the 70's the decade ended with rates over 11%, in the 80's interest rates went as high as 16.63%, and in the 90s we saw rates go from 10% down to 7% by the end of the decade. I know that's hardly consolation when we already were looking at stretching our budgets to buy condos and homes in the very competitive and expensive market that is LA. All in all experts expect to see prices to continue to hold steady but the rapid increases we've seen should be steadied by rising mortgage rates, it makes sense, lower demand will slow prices. Here in the trenches I am definitely seeing fewer offer come in and gentler handling of buyers. let's be honest, when the market was at it's craziest, buyers and their agents were getting treated like cold leftovers! If you have questions or want to see the charts and numbers on interest rates, or market research on home values in your neighborhood, drop me a line and I'll get those to you!
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Christina Linda Palomo
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