The San Pedro housing market for February 2023 saw significant changes to the average sale price of homes, indicating that rates may be putting pressure on home prices, despite low inventory.
Interest rates increased very slightly, only .10%. However, this month’s average sale price plummeted by more than $130,000. Despite the massive drop in the sale price, more homes sold in February (41) than the last 5 months and up significantly over January’s low count of 25 homes.
Interest rates have held somewhat steady, in the 6.5% range over the last three months. Although days on market dropped for January, February experienced an increase, sending the time it takes to sell a home in San Pedro to 41 days, almost double the average time it would have taken to sell a house in 2020-2022.
Next, let’s take a look at single-family homes specifically.
The average price for a single-family home in San Pedro has decreased for the first time since September ’22.
With February’s sale average price dropping, we can see the 12-month trend line is nearly level.
The time it takes to sell a house in San Pedro has been steadily increasing since June ’22, going from just over two weeks to 53 days in February ’23. With the exception of the summer months (June – August), days on the market and interest rates have had an almost direct correlation, seeming to only decrease when rates go down or stay somewhat consistent. This was not the case in February, as rates only increased slightly, but days on market soared compared to last month.
Next up, let’s look at condominiums and townhouses.
The average sale price for a condo or townhouse in San Pedro decreased compared to December ’22.
February’s sale price average for condos and townhouses leveled the trend line for sale prices, decreasing by over $30,000 compared to last month. With the new average, prices are trending evenly, even though the number of condos sold more than doubled from 9 to 19 condos sold.
The amount of time it takes to sell a condo or townhouse in San Pedro increased slightly this month, after falling by nearly half in January. Even though last month’s drop seemed like an anomaly, February’s average seems to be more in line with other months compared to the interest rate.
Since Condos & Townhomes are typically the most affordable properties, there is often more demand for them from buyers. This could be the reason why days on the market and sale prices, although affected negatively, were not nearly as bad as what we saw with single-family homes. We expect demand for condos and townhouses to remain competitive since the inventory is still low, countering the effect of higher interest rates.
Moving forward, we are expecting rates to stay somewhat consistent which should help gain some confidence in the housing market. Keep a close eye on sharp increases in interest rates, as more are scheduled to happen this year according to the FED.
Buyers in this market should be negotiating deals, as sellers have lost much of their leverage over the past 12 months. But keep in mind that inventory remains low for ALL of Los Angeles and much of the state. If buying real estate is one of your goals and you were a buyer in the market over the last 2 years but ultimately gave up because of stiff competition from conventional buyers, now is a phenomenal time to be a buyer because of the leverage you have on sellers. In this market, sellers will welcome FHA offers, VA offers, seller credits, repairs, and loan buy-down programs in order to sell you their home.
Sellers in this market should be doing everything they can to distinguish their homes from others on the market. Presentation and condition are extremely important, so preparing your home for sale and making sure it looks and functions as best as it can is of vital importance if you want a successful sale. Doing so may result in multiple offers on your property, which would significantly boost your leverage with buyers. And yes, we can help with all of this, all included in our standard commission! Learn more by visiting our Concierge Real Estate Services page.
If you’re ready to start your real estate journey, contact us today!
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