Market of the Moment - 7/21/2022
A day early today since I'm in a conference tomorrow.
Well, we are here, over 1,000 homes under 700k in Salt Lake county. Days on market for the homes that closed in the last 7 days were low compared to last week, those days on market are the average between the homes that closed that week. So don't throw a fit Trevor Thompson.
Who is really winning with the high interest rates? It isn't sellers or buyers, it's the banks. They are the only ones getting ahead. Sellers aren't getting what they could have gotten six months ago and buyers are paying more per month than they were 6 months ago.
Yet, why is now still a good time to buy real estate? Because interest rates are continuing to go up!
A market like this takes an investor mindset even if you are only buying your own home to live in. People are more concerned about what their monthly payment is versus the cost of the house.
It's easy to say "the market is still too high, people are lowering prices, I'll just wait until the bottom hits." But here's the thing, how do you know we've hit the bottom? Its when we start going back up! There is no timing the bottom in real estate.
If prices go down but the interest rate continues to go up, how are you benefitting from "the bottom"? You're still paying more per month in mortgage payment.
Median home price in Salt Lake County is telling. In May the median home price in Salt Lake County was $650,000. So far in July, the median home price is $600,000.
I'm about to do maths, so bear with me here, I promise a punny ending!
A loan payment on 650,000 (supposing nothing down) at 3% is 2,740.43. A loan payment on 600,000 (supposing nothing down) at 6% is 3,597.30. At 7% and 550,000 its 3,659.16. See where this is going?
Don't look at the purchase price and think that's all that matters. If you are buying, buy while rates are where they are at now. The Fed said they are meeting 7 times this year to talk about raising rates. 7 times!
OK, maths done.
Instead of a pun, I'd like to know how many people want to see me in a video as a Victoria Secret swimsuit model?
