How much do you know about the current state of the Pasadena housing market? And what do you need to know? When is a good time to buy or sell, and why is that the case?
Meg Middleman is in the best position to answer these questions and more. As we approach 2023, staying on top of market trends is vital. Meg knows how national conditions affect Pasadena locally, just as she knows the singular features that separate Pasadena from the pack. Whether you’re investing in Pasadena luxury real estate
or preparing your home to sell
, Meg and her team have you covered.
Knowledge empowers your homeownership journey, so read on to expand your perspective of Pasadena real estate.
1. Interest rates are an X-factor
You may know that interest rates increased through 2022. As of this writing, the average rate
for a 30-year fixed mortgage was 6.6%. The average California rate for the same mortgage was 6.3%, while recipients of a 15-year fixed mortgage would incur about 6.2% interest.
Interest rates reached their current levels on the heels of a strong seller's market. Homes sold for astonishingly high prices in 2020 and 2021, and the interest rate was low. Low interest rates compelled buyers to rush the market, and sellers fielded offers well above their asking prices.
Likewise, higher interest rates corresponded with a slowdown in 2022. The interest rate is not the end-all-be-all, but it is a helpful indicator of the market conditions for buyers.
2. The Pasadena housing market has favored sellers
Home prices in Pasadena have fallen in recent months, and there aren’t nearly as many homes selling as past averages would lead you to expect there should be. Homes are spending slightly more time on the market than they usually do. Despite these challenges, the market remains fairly competitive. Many homes will sell for a final price above asking, and it’s common for homes to receive multiple offers. Usually, a home will stay on the market for a few weeks before it goes under contract.
3. Interest rates could rebound in 2023
Nobody knows when inflation will slow down or interest rates will drop. The Federal Reserve has expressed optimism
that interest rates will return to their 4.5 percent average shortly. They acknowledge that this is beneficial for everyone involved. However, most people believe inflation will have to get under control before anyone can expect a drop in interest rates. It’s difficult to predict when this could happen, but rest assured that things won’t be this way forever.
4. Pasadena will remain a robust market
In desirable locations like Pasadena, luxury homes are less beholden to the national housing market conditions. On the one hand, nobody is likely to mistake Pasadena as a thrifty market. Newcomers to Pasadena are wary of its relatively high cost of living (particularly housing prices and taxes). However, because Pasadena has a universal appeal for luxury buyers, homeowners are virtually assured their property will appreciate in the long term. Paradoxically, the Pasadena housing market is a goldilocks zone where conditions favor buyers and sellers.
5. Expect prices to fluctuate during the year
Don’t be surprised if prices rise slightly during the late spring and early summer. Buyers are more active during these months, and sellers know they can make more money
. By late April or early May, many people have received their tax refunds and can use the extra cash to fund their down payment. Families with school-aged children can also think about making a move without worrying about how classes could interfere with their schedule.
It’s also normal for prices to dip slightly in October, November, and December. These are usually the months where the least amount of market activity happens. When buyer demand is down, sales prices decrease as a result.
6. Construction is a big question mark
When factors like high interest rates constrict housing markets on a national scale, new construction is one way to alleviate that bottleneck. However, the costs of construction are also high. Increasing material and labor costs, along with supply chain challenges, are making things difficult for builders, and that dynamic is reflected in high costs for homebuyers. Homebuyers interested in building from scratch or adding to their current houses should keep a sharp eye on construction as we get deeper into 2023.
7. Motivated buyers and sellers can capitalize on market uncertainty
Given the above factors, it’s understandable why somebody would have concerns about buying or selling a home in 2023. However, by all indications, 2023 will be a reasonable time to buy or sell a home.
With a trusted realtor, consider your current financial situation and your motivation to change locations. If you’re thinking about buying a home in the next several months, you will benefit from sales prices that aren’t expected to rise far beyond where they currently are.
If selling is a possibility for you, you will still have a chance to capitalize on the exponential growth of average sales prices that has taken place over the last several years. If you’re curious about what your home may be worth today, reach out to your realtor and ask if they will run a comparative market analysis. This report will help you understand where you could price your home (and what your home might appraise for) based on recent sales in your area.
It’s easier to buy or sell a home when you have an experienced agent helping you. Meg Middleman
and her team can help you when it comes time for you to buy or sell a home in Pasadena. She takes great pride in helping her clients cross the finish line.
These are exciting times, and Pasadena remains an excellent place to live. From buying contingencies
to foolproof staging advice
, Meg and her team approach her real estate business with enthusiasm and genuine care for her clients. Reach out to Meg when you’re ready
to take the next step toward buying or selling a home.