The sales price of single family homes in Elk Grove is still up over the last year, but since the Fed started raising interest rates earlier this year, the average price of homes has dropped 7% from $703,000 to $654,000. On Average, homeowners have lost $49,000 in a very short period of time. It is clear that the Fed will be raising interest rates again at their next meeting. They have made their strategy very clear. It is too bad they did not take their mandate more seriously and address inflation much earlier instead of waiting until it was so entrenched.
It is remarkable how much household wealth has been lost since this all started. Reuters says, "U.S. household wealth fell by a record $6.1 trillion in the second quarter to its lowest in a year...The latest fall was led by a $7.7 trillion decline in stock market values as equities slid into a bear market in the first half of the year on worries about surging inflation and the Fed's aggressive response with interest rate increases. The equity market drop outstripped a $1.4 trillion gain in real estate values." If Elk Grove numbers are any indication of the real estate market across the country, the next reading will be even worse.
To add fuel to the fire, fiscal policy continues to add large amounts of stimulus. I have no ability to see into the future, but I really do think it is time for caution.
If I was a buyer, I would take my time. Yes, interest rates will probably go up and raise the cost of your loan, but if prices have fallen 7% if a few short months, what will the next few months bring? If you do choose to purchase now, make sure your offer price reflects the current market. There are plenty of homes listed way too high. If a home is priced appropriately, you still may find some competition, though.
I think purchasing a home is one of the best ways to create wealth. If you are buying for the long term, these market corrections do not matter that much, but I purchased my first home at a very bad time (1990) and it took me over 15 years to get back to even. This is a time for caution.
Make sure your property is in its best possible shape and price your property correctly. I have been holding a lot of open houses lately and buyers are just not very motivated. They are being very patient. If you have owned your home for any length of time, you will be fine.
Fun Things to do in Elk Grove
We held our first Runnin for Rhett Pickleball tournament in Elk Grove this last weekend at Oasis Park. It was a huge success and there was a lot of great pickleball played. If you have been wanting to join in on the fun, come on out and play. Maybe you will be ready for next year's tournament! ! !