Unlike short and sweet February, March was a long, almost 5 week month that was a solid bookend to the first quarter of 2022.
March 2022 real estate stats for our area, Long Beach, California
Each of the metric below is a clickable live link that you can click to get the entire graph which will give you a clear picture of the trends in the local market:
Pending Sales: Sharply down from last month, sharply down from last year’s March. Pending sales March 2022 were 226, down from 309 in February 2022, and down from 389 in March 2021. Major downward trend in Pending Sales.
Median Sales Price of Homes Sold: Down slightly from last month, but still way up from last year. Median home price in March was $755,000, down from in February at $767,500, and up from last year March at $658,000.
What does this all mean?
(1) Listing inventory is still low, but is growing slightly.
(2) Number of sales are down, as evidenced by sharp decrease in pending sales numbers.
(3) Prices increases are slowing, and in fact prices are coming down compared to previous months.
All these observations are pointing toward the same thing: A Shift in the Market
Seeing more inventory building up, prices coming off their peaks, and a dramatic drop in pending sales means the market is shifting. If you are wondering why, the main answer is the rapid rise in interest rates that have occurred in the last 30, 60, and 90 days.
Interest rates for mortgages were right around 3% at the beginning of the year, and they were rapidly on the move, which at least partially explains why the first quarter of 2022 saw lots of buyer demand as interested buyers saw the urgency of purchasing sooner rather than later in order to take advantage of lower rates before they moved higher. At this junction, rates for many loans are near 5%, causing payments to increase, and causing some potential buyers to exit the market.
Fortunately, there are still some loans that have lower rates, such as adjustable rate mortgages, and some buyers are using a higher percentage of cash than loans, so are less affected by the interest rates.
Conclusions and looking forward
Similar trends are happening all over Southern California and across the country, not just in Long Beach. Home prices remain high and supply remains low, but both of these are shifting and changing. Inventory is building in the market, which is slightly and gradually favoring buyers, as they are more often competing with 4 or 5 other offers instead of 16 to 20.
What do you see happening in the future with our real estate market? Do you feel home price decreases will follow, or that buyers will adapt to the rates soon and continue to have strong demand in our market? Will inflation keep home prices high, or will the market cycle down as it has in the past?
Call me if you’d like to discuss your personal situation and how my team and I can assist, and if it is about interest rates and mortgage loans, we have excellent loan officer partners than can answer all your questions about down payments and interest rates too.