You read that right, interest rates are currently over 5% for conforming 30year fixed loans. None of the experts predicted rates would get this high, and certainly not this fast. I guess that was wishful thinking on their part.
What do these new high rates mean in the first week of April 2022? You’d think this would lead to a slow down in the market. There are definitely some people getting priced out, and maybe things will start slowing if these highs persist later into the year. In the short term, I think it’s got people scrambling to find a place and I’m seeing them going all-in with their offers in the process. Spring has sprung and there is a fresh crop of buyers in the market who are more motivated than ever.
The buyers out there seem to have more cash than ever too. These days, people ‘only’ putting down 10% are at a competitive disadvantage going against others with 30-50% down, and even all cash offers! That may be why the interest rate increases haven’t been as big of a factor as they have in the past for so many buyers. People buying houses in the Bay Area also seem to be making more money than ever before. It’s no wonder the buyers are able to absorb the interest rate hits and keep moving forward with their house hunts, like a running back shaking off a tackler. Think Derrick Henry, the Tennessee Titans back, who routinely runs over and through anyone that gets in his way.
Inventory shortages persist, which is why the demand has yet to be met. I’m hearing about the lack of available housing and seeing it in all parts of the Bay Area. As long as the buyers outnumber sellers, we are going to see continued appreciation.
Speaking of appreciation, in Q1 of 2022 the median purchase price of a single family homes in Marin County was $1,678,000. Nobody in the contest guessed that high. The highest guess was from one of my Terra Linda neighbors at $1,635,000. My brother Dave came in a close second guessing $1,625,009. BTW friends and family were not excluded from this contest and everyone is encouraged to enter my next contest.
Next week I’ll break down the historical median pricing of single family homes and condos again and ask people to submit their guesses for Q2.
In the meantime, there was no need for a tie-breaker in this contest. That’s too bad for my friend Bill Reid who guessed the median price of condos would be $690,000. He came the closest, as the median hit $700,000. Brother Dave again came in a close second guessing $685,000. I have a feeling Dave is going to be the one to beat in Q2!
Thank you to everyone who participated in the guess the median price contest!