Interest rates and inventory (supply of housing) are increasing in the marketplace. As of Monday, according to Jim Gallup of Origin Rate, a 30-year fixed jumbo mortgage is at 7.625% and a 7-1 adjustable-rate jumbo mortgage is at 7.25% The difference is so nominal in mortgage products because of the inverted yield curve. In fact, in talking to Hunter Marckwardt of CrossCountry Mortgage, most mortgage advisors are not recommending adjustable-rate mortgages because there is not enough of a difference in the rates to warrant them. When you add in today’s high cost of homeowner’s insurance, affordability continues to slowly knock out some of the buyers in the marketplace. 

What does this mean for buyers and sellers in Lamorinda today? The market has been slowing down at a subtle pace. Inventory is increasing slightly as demand lessons, but year-over-year inventory levels are still down -29% (per MLS) in Lamorinda vs inventory levels seen in 2022. However, luxury inventory levels are struggling. For homes priced between $1 million and $4 million dollars, there is 1.2 months of supply or less signaling an advantage to the seller. For homes priced above $4M, there is 8.5 months of supply, signaling an advantage to the buyer. 

In terms of pricing, increased supply equates to less demand (competition) and lower prices over time. According to Mike Simonsen, Founder of Altos Research, if mortgage interest rates hit 8%, we will see big changes in the marketplace. According to Robert Reffkin, Founder and CEO of Compass, when we see mortgage interest rates return to 5% - 5.5%, sellers will be enticed to list their properties and bring back "the pandemic craze."

For now, it is a house-by-house and case-by-case scenario. Our team is still seeing opportunities in this manageable real estate market. Lean on our expertise to guide you!

Dana & Team