After many months of continuous tiny increases, the ten-year treasury rate finally hit 5%, resulting in conventional mortgage rates nearing 8% and causing a housing sales slowdown. In the last month or two, many buyers vanished, throwing in the towel and hoping to try again in 2024 as an 8% mortgage is a difficult hurdle to clear.

In October we saw less sales and quite a few price reductions. But no sooner you’re up when you’re down again.

News of a slowing economy late last week with unemployment ticking up and job creation slipping caused the ten-year treasury (the base rate) to plummet almost half a percent and thus pull-down mortgage rates to 7.5% and even 7.25% with a buy down fee. Suddenly buyers are sticking their heads out of the ground and having a look around.

I received a few calls this week from some of my buyers wanting to look at a couple properties and open houses. The ice may be thawing.

There are a ton of buyers out there on the sidelines, with excellent incomes and fatigue of renting; desiring to purchase a primary home. While a slowing economy is not ideal, it will at least bring down rates, (maybe even into the 6’s!) and ramp up sales activity.

If the news of a slowing economy continues to unfold over the next few months and rates continue falling, I would expect a more robust local real estate market early next year. The only hitch will be inventory. As we have seen in the last year, homeowners are reluctant to give up their 3% mortgage rates and are electing to either stay in a property or rent it out, reducing the available homes for sale.

However, there are always certain sellers needing to sell for various reasons (based on the 3 D’s of debt, divorce, and death among other reasons such as moving out of state, etc.) and we could find ourselves again with new listings receiving multiple offers and prices pushing higher.

If you are interested in buying or selling next year, give me a call to discuss plans and options!

MARKET REPORT (Single Family): College Area (92115): October median price up 3% year over year to $890,000 and with 65 homes for sale (a 40% increase) San Carlos (92119): median price up 10% to $1,050,000 with 33 homes for sale. Del Cerro/Allied Gardens (92120): median price up 10%, year over year to $1,138,000 with 36 homes for sale (a 16% increase).

– Sarah Ward is a REALTOR with Coldwell Banker West. Reach her at: [email protected].

(Photo credit: Pixabay.com)