The National Association of Realtors just released its October 2017 pending home sale index report for the United States. A pending home sale is one that is in contract, but has not yet closed escrow. Economic experts measure this as a barometer for future home sales. The good news is that the pending home sale numbers are up after several months of decline nationwide. The number jumped 3.5 percent from September to October.
Increasing Home Prices
However, the index still remains slightly below what it was at the same time last year. One of the main reasons for this is low housing inventory. Homeowners are holding onto their properties as home prices continue to increase throughout most of the country. The median home sales price in October is up by 5.5 percent over last year. This has continued the trend of a property shortage and a hot seller’s market. When homes are going up for sale, they are selling very quickly.
San Diego County and Southern California as a whole have really seen the power of this trend. It has been a red hot market for sellers, but buyers are still being active because interest rates remain low and houses are still affordable.
2018 Inventory Forecast
Many real estate economists believe that more homes will come onto the market in 2018 and start to level out the playing field a little bit. Part of this is the natural ebb and flow of real estate in a majority of markets where the early spring and summer are the most active times of year. This is usually true even in Southern California where weather is less of a factor during the fall and winter months.
I’ll be interested to see if housing inventory increases and the increase home prices throughout San Diego County starts to slow down some. We already know that Fannie Mae and Freddie Mac have increased mortgage loan limits for 2018 in reaction to rising values. Keep in mind that those kinds of factors can also affect mortgage interest rates, which could start to go up again. The real estate market has a great way of balancing itself out over time.
Preparing for Buying a Home
If you are considering buying a home in 2018, there are steps you can take now to prepare. You’ll want to have your credit rating in good standing and be ready to act quickly when the time comes to start making offers. You’ll want to get pre-approved for your mortgage loan rather than just pre-qualified. Even if inventory increases, it will likely stay a seller’s market for awhile and properties will continue to sell quickly. Be prepared to jump on your buying opportunities.
For more information about San Diego mortgage and real estate trends, or to get started on your home loan application, call Transparent Mortgage today at (619) 929-0199.