Real estate: A year of change but market is strong
If I had to describe 2022 so far in a few words, I’d have to say it’s been a year of change. Politically, economically and of course in the world of real estate (which is by far my favorite topic.)
There is a buzz going around, (and I’m not talking about the kind you get off of those delicious Rum Runners. (Shout out to the Beacon!)
I am talking about the buzz you are hearing when you are at a restaurant or talking with your friends, family, or favorite Realtor.
Everyone is having the same conversation; you may have heard it. You know, the one that goes, “Yeah, but if I sell, where would I go?” or “I’ve been trying to buy, but I’ve beaten out on multiple offers, I am exhausted.”
Buyers have become exhausted. From 2020 until now, if you have been trying to buy a house, it’s been like two snakes in a pit going after the same mouse. Graphic, I know, but you get the point.
Most recently, however, we have added another element to the equation … rising interest rates. Rates have been increasing at a rapid pace over the last few weeks. What is causing this? Well, there are many reasons, but rates are rising in response to record-high inflation and recent changes made by the Federal Reserve. If you have been watching, you may have noticed that interest rates jumped 0.75 percentage points in June. This is huge, this has been the highest rate increase since 1994. So as a general rule, when inflation is low, mortgage rates tend to be lower, when inflation is high, rates tend to be higher. See the relation?
I’d like to call this a double-edged sword. On one hand, the rate increase is allowing prices to stabilize, which in all honesty, is what the market needed. Real estate is going to be one of the best things you can invest in, however, we needed to see a more sustainable market.
Now, on the other side, (remember, double-edged sword analogy) if you are trying to purchase a property with bank financing involved, you have likely noticed a shift in your price point due to affordability and increased rates.
So, what does this mean for our community? I don’t have a crystal ball, but what I can tell you, is while looking at the local statistics, it is not as grim as the horror stories you may be hearing. When I pulled the sales stats for May from the California Association of Realtor’s website, I compared the numbers from 2021 to 2022 and it says 53 homes sold in South Lake Tahoe. This is down 25.4% from May 2021. However, there were 128 active listings, which is up 36.2% from last year and the median home price is $800,000 which is an 8.1% increase from May 2021.
Now, what does this mean? Sales in South Lake may be lower than last year’s numbers, but home values and inventory are still staying strong.
So, my advice to you is, if you are looking to buy, lock your rate. If you want to invest, invest in real estate. If you’re looking to sell, take advantage of the selling season. There are still buyers out there, people are still trying to get into homes. It may not be the flurry that we saw in 2020, but our market is still going strong.
Kaylin Culver is a Realtor for Re/Max Gold and Re/Max Realty Today based in South Lake Tahoe. She is part of owner/broker Jesse Schue’s Lake Tahoe Real Estate Team.
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