Are you planning to buy your dream home in Porter Ranch, CA? Buying your dream home is likely one of the most significant financial decisions you will make in your lifetime. We know it can be overwhelming and slightly frightening since it will directly affect your current and future financial state and lifestyle.
There is a lengthy list of factors to consider when buying or selling a home; there’s job security, supply and demand, and emotional state, among many others. However, two main factors that influence Porter Ranch current real estate market are interest rates and inventory.
2 Important Factors that Influence Porter Ranch Current Real Estate Market
» Interest Rates
The mortgage rates are more likely to rise than fall throughout the year 2021. The Mortgage Bankers Association expects the 30-year fixed mortgage rate to average 3.7 percent by the end of the year.
So, what does this mean for Porter Ranch, CA buyers, and sellers looking to make financially sound mortgage decisions? In the real estate business, common wisdom points out that rising mortgage interest rates make buying or selling a home harder while decreasing mortgage interest rates make buying and selling easier. It is because high-interest rates lead to a rise in the cost of debt. A high cost of debt then discourages people from borrowing, leading to a decline in consumer demand.
To put this into perspective, let’s say Rick wants a 4% rate on a 30-year fixed mortgage for a home in Porter Ranch worth $400,000. He’d be paying a monthly mortgage payment of $1900. If he only qualifies for a 5% rate, he’d have to pay a monthly mortgage payment of $2,138. The new terms impact his purchasing power.
However, buying a home in Porter Ranch during this period of rising mortgage interest rates is nothing to fear since even a 5% mortgage rate is still historically low. Rising interest rates also reduce prices.
In real estate, inventory refers to “Active Listings” or “Homes for Sale.” It is the raw count of the number of available properties for sale in a given location.
To calculate the inventory number, you count the properties marked as active on the last day of each month. For instance, the inventory of Porter Ranch, CA stands at 52 at the writing of this article.
The market of Porter Ranch, CA real estate follows the concept of supply and demand in the same way as most products do. Real estate professionals track the balance between supply and demand with a metric known as “the months’ supply.” The months’ supply refers to the ratio of houses for sale to houses sold. It calculates how many months it would take to exhaust the current supply of homes given the current demand rate.
During the past month, real estate marketers sold 20 homes in Porter Ranch, CA. With an inventory of 52, the real estate market of Porter Ranch, CA, can’t satisfy the demand for homes for the next six months. Therefore, there is high demand which leads to more competition for the available properties.
An analysis of the Porter Ranch housing market reveals that the median sale price for homes in Porter Ranch increased by 26.83%. The increase in prices is a result of basic economics: supply and demand. The homes in Porter Ranch also sell over list price, with a staggering 80% of homes having sold above list price in the past year.
While the low inventory gives an advantage to sellers in Porter Ranch, CA, you should also consider that the number of new homes for sale in Porter Ranch, CA coming on the market each month has also increased significantly over the past year.
Keeping a focus on these two factors will enable you to make sound decisions when buying or selling your home in Porter Ranch, CA.
Today, interest rates remain near historic lows, which bodes well for buyers, as the real estate market reflects some of the cheapest debt a home buyer can attain in the market. Whether you plan on purchasing or selling your home in Porter Ranch, CA, a proper understanding of the housing inventory is critical if you want to ensure a positive return on your investment.
Following the advice of those who have been there and done that will help you feel more knowledgeable, confident, and secure when purchasing a home in Porter Ranch, CA. Are you selling? The seasoned real estate experts in Porter Ranch, CA, Mel Wilson & Associates will dramatically increase your chances of closing deals quickly and maximizing your profits.
Need help selling or buying a house in Porter Ranch? Mel Wilson & Associates is here to help with your real estate needs. Contact us today at email@example.com or call us at (818) 993-4606.
Let us help you get a better deal!