Home prices continue to fall in San Mateo County

And the slowdown is predicted to continue throughout the nation. CoreLogic’s Home Price Index forecast suggests annual home price growth will slow to 9% by December, and further down to less than 1% by the end of the first quarter 2023. Some markets are seeing price increases, albeit slower, particularly in the South and Southwest as people in expensive coastal areas seek affordability. Other markets are seeing more significant slowing of home price appreciation, particularly those on the West Coast and in the Mountain West, where high mortgage rates are severely impacting affordability, according to CoreLogic.

Throughout the month of September, interest rates have steadily increased. The average rate as of Sept. 20 was 6.94%, a 32% increase, according to Freddie Mac mortgage rates data.

Rates continue to climb into October and Keller Williams Real Estate Agent Amanda Elhassan, who focuses on both East and West Bay cities, said that there could be another interest hike in November and possibly December.

“I think [home] prices will continue to go down and at least one more rate hike before the end of the year,” Elhassan said. She explained the reason home prices are falling is because sellers are trying to combat rate hikes and, in some cases, the houses are on the market longer than expected.

Elhassan believes that the market will continue to be slow throughout the winter months.

“The only thing I try to reiterate to everyone is that market stabilizing does not equate to a crash,” Elhassan said.

Single-family residential homes on average were on the market for 29 days in September, compared to August’s average of 23 days.

Ektar Real Estate Agent Charles Gillooley Jr., who focuses on San Carlos among other areas, said the current state of the market is a direct correlation to the spike in interest rates. He added that when mortgage rates increase, the buyers’ monthly mortgage increases and it gives them less buying power.

“In this area, a lot of people, their down payments are tied to equities, they haven’t liquidated them yet, they have them in stock. They are waiting to sell them and then when the stock goes down it’s kind of a double whammy, so every time this [interest rates] ratchets up it really hurts the market here,” Gillooley Jr. said.

He added that the recent interest rate increase is the fastest since the data for rates has been recorded and the federal government is trying to catch up with soaring inflation issues.

“A lot of it is the psyche of the buyers, they see the rates going up and a lot of them are just pulling themselves off the market,” Gillooley Jr. said.

nick@smdailyjournal.com

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