During the past year, home prices in Sacramento County, Placer County and El Dorado County have risen 25% - 40%. That brings current prices to 2003 levels. While this month has seen a slowing in apprciation, most analysis expect prices to climb another 6% by the end of the year. Thus, it’s still a great time to buy.
Home pricing is not the only dollar figure to be keeping an eye on. The graph below illustrates that for every 1% interest rates rise, it reduces your purchasing power by 10.75%. These rates have risen over 1% in the past twelve months and are expected to increase another 1% in this coming twelve months.
Thus, when you combine the 6% increase in property values with a 1% increase in interest rates, today is a good time to be making your purchase as an owner occupied resident, or as an investor.
Inventory remains constrained but the fevored pitch of multiple offers over asking seems to be cooling down just a bit. I suspect with the increased listing price, coupled with the higher interest rates, this translates into a few want-to-be buyers temporarily taken out of the market. Carpe Diem as a delay will surely cost you more.
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