December 2022: San Francisco Real Estate Insider

Happy Holidays and I hope you had a great Thanksgiving break. As we spend the next few weeks closing out the year, I am seeing an uptick in activity. There are a lot of buyers out seeking deals and I am seeing buyers actually getting deals. Most of the deals are in the condo / TIC category but single family deals are definitely occurring. On my listings, my sellers are motivated and have singed counter offers at below comps. Likewise, some of my buyers are writing on single family homes with 30+ days on the market and getting very good counter offers. I love year end; it’s always more active than you expect it to be! 

Another positive for the active buyer; interest rates continue to drop and the Fed chief Jerome Powell stated last week that “The time for moderating the pace of rate increases may come as soon as the December meeting.” Translation; the Fed should reduce the expected future rate hikes or possibly not have as many (future) rate hikes. stock market surged on the news so hopefully we are onto a new trend!

The week before Thanksgiving, interest rates plunged nearly half a percentage point and they dropped again last week. The 30-year fixed-rate mortgage averaged 6.58% in the week ending November 23 (down from 6.61% the week before, according to Freddie Mac). For reference, a year ago, the 30-year fixed rate was 3.10%.

Also in positive mortgage news, in 2023 the conforming loan limit (home mortgage loans eligible for backing by Fannie Mae and Freddie Mac) will rise to $1,089,300 in high-cost markets such as parts of California and New York (the limit is currently $970,800). Conforming loans generally come with lower closing costs and can require a smaller down payment than mortgages that exceed the limit (aka jumbo mortgages). For most parts of the US, loan limits will rise to $726,200 from a 2022 maximum of $647,200. 

If you are not active in the market, hopefully you are taking care of the holiday shopping. Remember just six months ago, inventory of almost everything was scarce because of supply chain failures and the lockdown in China (due to COVID). How quickly things change; this holiday shopping season is shaping up to be one of super sales. Shelves are full of product and retailers are worried about moving all of their inventories due to the current economic environment. I saw unusually large discounts on Black Friday / Cyber Monday and retailers will continue with the steep price cuts all the way through the New Year (maybe a little lesson to the Fed; if you want to bring down prices, increase inventories). Power to the consumer.

I’ll be back on 2023 with an annual recap. In the meantime, I am focusing on being grateful this Holiday season. In our culture of abundance and material wealth, be grateful for the meaningful, yet simple things in life that generate happiness. A “thank you" from a client, dinner at home with friends and family, helping a friend or neighbor in need, or a bike ride with my boys.