The Cascade Team Real Estate Blog

Mortgage Rates Just Hit a 4-Month Low, but Do Homebuyers Even Notice—or Care?

Recognize that media outlets and social media influencers are competing for scoops and eyeballs. As a result, their reports sometimes exaggerate issues, don’t tell the whole story, or get it wrong…. And the same thing can be said about the local housing market.

Mortgage rates are down again this week, which means things are looking up for homebuyers.

The average rate for a 30-year fixed-rate mortgage ticked down 2 basis points to 6.13%, according to Freddie Mac, continuing a pattern of rates seesawing lower since topping 7% in the fall. In fact, mortgage rates are at their lowest levels since mid-September 2022.

Yet, while lower borrowing costs are a boon for

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Weekly Review
Newsletter - 1/30/2023

Week of January 23, 2023 in Review

Housing activity moved higher in December, inflation continues to cool, and more recession signals are flashing:

  • Inflation Turning the Corner
  • Pending Home Sales Rise for First Time in Six Months
  • New Home Sales Ticked Higher in December
  • Caveats to Positive Fourth Quarter GDP
  • Initial Jobless Claims Decline for Second Consecutive Week
  • Economic Slowdown and Recession Signs Continue

Inflation Turning the Corner

The Fed’s favorite measure of inflation, Personal Consumption Expenditures (PCE), showed that headline inflation rose 0.1% in December, while the year-over-year reading declined from 5.5% to 5%. Core PCE, which strips out volatile food and energy

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NOW is ABSOLUTELY the best time!

We all know that home sellers have had the upper hand for several years, but those days are behind us, and though the market has slowed, there are still buyers out there. The difference now is that higher mortgage rates and lower affordability are limiting how much buyers can pay for a home.

Because of this, I expect listing prices to pull back further in the coming year, which will make accurate pricing more important than ever when selling a home. 

In Seattle I expect somewhere between 9 and 15% continued drop. (That’s around 1% per month but still much less than we saw in many cases last year.)

“As a side note remember we saw some areas literally increase by 100% in a single year

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A strange topic for a blog post I know, but for the past month I have felt like I have been living in the Twilight Zone dealing with ever increasingly aggressive rabbits….

Blame the unusual weather patterns, pesticides, or sheer malicious intent; any and all reasons end with one undeniable fact: The rabbits in Sammamish are out of control and they are Hell-bent on taking one of us with them when they go…

On any given morning, just as the night gives way to the light of day you can see them waiting in the bushes just off the side of local neighborhood roads. Carefully you head down the street, eyes peeled, the radio playing lightly in the background….. And “BOOM!”

Another rabbit shoots out into the road, darting directly under your tires

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Home Prices to Tumble Over 25% From Peak Levels in ‘Overheated’ Markets, Says Goldman

Credit researchers at Goldman Sachs now expect home prices in several “overheated” metro areas to fall over 25% from peak levels

Metro areas included in their forecast were Seattle, Denver, Phoenix and San Diego, according to a new home-price outlook from a Goldman research team led by Lotfi Karoui.

Some of the markets at risk for the biggest price drops this year already saw at least a 10% depreciation in home price growth, according to the Goldman team. 

Nationally, the Goldman team expects home prices to fall by roughly 10% this year from June 2022 levels, following their roughly 4% estimated decline in the second half of last year.

1. There is no

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A new survey finds Americans are woefully misinformed about the nation’s mercurial housing market, even as millions of them prepare to buy homes.  

Twenty-eight million Americans plan to purchase a home in 2023, according to a survey released Tuesday by NerdWallet, the personal finance company. On average, they hope to spend $269,200. 

But that figure falls more than $100,000 short of the median home price, which was $388,100 in December, according to the real estate brokerage Redfin. Home prices crossed the $269,000 threshold sometime in 2013, Federal Reserve statistics show. 

If prospective homebuyers sound oddly optimistic about prices, that may be because they are pessimistic about the state of the housing market. Two-thirds of Americans

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Weekly Review
Newsletter - 1/23/2023

Week of January 16, 2023 in Review

Recent housing data brought some better than expected news, while wholesale inflation cooled in December. The contraction in manufacturing continued this month. Here are the details:

  • Sales of Existing Homes Higher Than Expectations
  • Two Sides to Housing Starts Data
  • Is the Uptick in Builder Confidence a Turning Point for Housing?
  • Wholesale Inflation Much Cooler Than Estimates
  • Jobless Claims Continue to Reflect Slower Pace of Hiring
  • Manufacturing and Retail Sales Data Point to Economic Slowdown

Sales of Existing Homes Higher Than Expectations

 

Existing Home Sales fell 1.5% from November to December to a 4.02 million unit annualized pace, per

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NOW is ABSOLUTELY the best time!

We all know that home sellers have had the upper hand for several years, but those days are behind us, and though the market has slowed, there are still buyers out there. The difference now is that higher mortgage rates and lower affordability are limiting how much buyers can pay for a home.

Because of this, I expect listing prices to pull back further in the coming year, which will make accurate pricing more important than ever when selling a home. 

In Seattle I expect somewhere between 9 and 15% continued drop. (That’s around 1% per month but still much less than we saw in many cases last year.)

“As a side note remember we saw some areas literally increase by 100% in a single year during the pandemic.

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35.4 percent: Home sales plummet

Sales of existing homes dropped 35.4 percent between November 2021 and November 2022, when the most recent data from the National Association of Realtors was available.

The rapid rise in mortgage rates has slowed homebuying activity dramatically across the country after it reached a fever pitch during 2021, with rates hovering around 7 percent at times during November.

$928 million: Opendoor’s stunning losses

 

The iBuyer Opendoor tallied jaw-dropping losses during the third quarter of 2022, racking up just shy of a billion dollars in losses at $928 million, finding itself a victim of the slowing housing market as it was forced to sell houses for less than it purchased them.

Shortly after its

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What began as an extension of 2021’s high-flying real estate frenzy soon enough tumbled and fell to a near standstill by the Federal Reserve’s hiking of interest rates, rendering borrowing costs too pricy for most would-be homebuyers, who, no matter how hard they tried, couldn’t bend the numbers to their will. 

As rates rose, existing-home sales fell, builders pumped the brakes, price growth decelerated, and property sat on the sidelines far longer than forecasted. Real estate companies, meanwhile, braced for lean times after riding high through most of 2020 and 2021, with thousands of workers laid off and quarterly earnings reports showing losses — in some cases, to an unprecedented degree. 

To better measure an immeasurable 2022, we searched high

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