Article By: Jim Porter – January 13, 2023
Broker owner Brian Stumbaugh made a comment to me the other day that really struck me as something that gives me hope about 2023.
He reminded me that historically, the market is slow from Thanksgiving to the Super Bowl. He pointed out to me that this year, inventory is low and although there are thousands of renters who should buy and homeowners who should sell, many are sitting on the sidelines.
Brian has an all-cash buyer who has been looking for a one-story home for five months between $800,000 to $1.7 million in the Green Valley area and currently there are only five homes in all of Fairfield that fit the parameters, and none are in Green Valley. Broker owner Ryan Preston shared with me the current numbers on this market and confirmed 326 homes sold in December throughout Solano County and there are only 528 active and coming soon listings in the county, including new builder homes.
This is less than a two-month supply of homes and the average “days on market” is around 32 days. Ryan says in his opinion, “It’s a great time to buy and sell. Most first-time homebuyers tend to be short on cash to close and in today’s market Realtors can negotiate closing cost credits from the seller to lower the cash to close.”
Both Preston and Stumbaugh emphasized that because of this past 10 years of substantial appreciation, sellers who need and want to move up can afford to credit their buyers with incentives and still walk with a lot of cash/profit. It’s a win-win.
The first quarter of 2023 looks soft, however right after the 49ers win the Super Bowl and the heavy rains subside, I believe the inventory will increase substantially because tens of thousands of people bought their starter home from 2010 to 2020 and have now outgrown the home and need and want more space.
As far as the mortgage market goes today, it may be raining and pouring but the average mortgage company is snoring and there is no flood of refinance business. This month in America, there are only 270,000 homeowners who would benefit from refinancing in comparison to January 2022 when there were 7 million folks who needed to refinance. There are usually 500 sales per month in Solano County, so the 326 sales in December are obviously like a drenched wet blanket covering my industry.
The Mortgage Bankers Association is suggesting a 10% to 15% decline in volume the first quarter of 2023 over the fourth quarter of 2022 and a 40% increase in volume in the second quarter over this cold and rainy first quarter.
Now is the time for homebuyers and sellers to start the due diligence for purchasing later in the year. Call a Realtor and a loan officer today to review your options.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
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