October Market Update

Gas prices have been climbing up since 1989.  It went from less than $1.00 per gallon then to close to $1.60 in the 2000, and jumped to around $3.10 in 2010 and did not change for over 10 years till 2020.  However, in 2021, the price went up from $3.20 in January to close to $4.60 by the end of the year.  That is a jump of over 40%.  In 2022, gas prices soared a lot higher at over $6.40, so another 40% or so.  Since Covid-19 hit, people started to drive less, and have adjusted to a new lifestyle!

The same happened to the housing market, and even larger adjustment in the consumer behavior.  Home prices have surged and so did the mortgage rates. In Orange County, home prices went up by 4.3% in 2020, and up 15.9% in 2021, and even higher to 22% through the 2nd Quarter of 2022.  In Orange County, median home prices for Single Family homes have gone up since Covid-19 hit over 50% to $1.3 million!!!!!!!!!!!

Between rise in interest rates and increase in the home prices, demand had dropped to its low level.  Fewer buyers and no longer 30-40 offers on a property, so market times have increased substantially.  As a result of higher interest rates, homeowners are not willing to sell, and give up the low rates on their existing mortgages. So there is a lack of inventory despite the demand is less since mortgage rates have gone up!