Real Estate Market Trends

April 23, 2024

Real Estate Market Trends

In a world where change is the only constant, the real estate market continues to trend and fluctuate. Whether you're buying, selling, or investing, understanding its ebbs and flows is crucial. For simplicity sake, let's call these ebbs and flows, "boom's" and "busts". With its cyclical nature, the market's fluctuations impact property values, investment returns, and overall activity. So, what are the key factors influencing these fluctuations?

During market booms, we typically see rising property values fueled by strong demand, limited inventory, and economic growth. Financing also becomes more favorable, with lenders offering incentives and better terms, encouraging more buyers to enter the market. Conversely, during busts, property values may decline due to oversupply, decreased demand, or economic downturns. Tightened financing conditions follow as lenders become more cautious, making it tougher for buyers to secure loans.

Currently, we're still technically in a seller's market, but over the last 6 months or so in particular, we are observing housing trends that favor both buyers and sellers, marking a gradual shift towards a more balanced market with improved affordability for buyers. Yes, interest rates are higher than they have been since the drastic drop in rates that we saw during COVID,

but remember interest rates are only one marker that we look at it. With this rise in rates, buyers took back their ability to negotiate in many cases. This means, potentially reclaiming negotiations on other big ticket items like purchase price, repairs, seller paid closing costs, and other seller contributions that Buyers would not otherwise have been able to tap into during the crazy COVID market.

If you're seeking more information on the current market and inventory in San Luis Obispo County, don't hesitate to reach out. We're here to assist and guide you through this significant life decision. I'm Amber Johnson, with Pillar Real Estate, and thank you for tuning in.

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