Last summer they were preapproved; what should they do now?
Feb 20, 2023Marketwise for the Bay Area News Group and its flagships The Mercury News and East Bay Times
By Pat Kapowich | Published: February 20, 2022
Q: We’re waiting to buy a property, but we were preapproved by a lender last summer. We’ve now noticed, though, that sky-high home prices are dropping, and all the reports we see show housing prices dropping. The traditional loan we acquired has expired, and the loan officer is asking us to update the loan approval with current financial documents. Should we reboot our loan approval and home search or wait for the prices and interest rates to drop further?
A: It would be prudent to restart the homebuying process. Your comment — “All the reports we see show housing prices dropping” — is a broad statement, however. In the second half of 2022, home prices decreased as interest rates increased. The headlines about the declining real estate market, supported by reports using statistics from prior weeks or months, captured the print, television, radio and online news. In short, current information in February 2023 shows homebuyers are touring open houses and buying homes.
Let’s review the latest real-estate roller coaster of home sales:
1) California’s median existing, single-family detached home price receded in January to $751,330, down 3.0 percent from the $774,850 recorded in December, which was the fifth straight monthly decline. (Source: C.A.R.)
2) January’s 2023 median existing, single-family detached home price also was lower on a year-over-year basis for the third consecutive month, declining 1.9 percent from the $766,250 recorded in January 2022. (Source: C.A.R.)
3) The National Association of Realtors (NAR) reported a 34.0% drop in existing U.S. detached single-family home sales with 6,090,000 in December 2021 vs. 4,020,000 in December 2022.
4) NAR announced the existing detached single-family home sale price in the U.S. increased by 2.3% from $358,800 in December 2021 to $366,900 in December 2022.
5) The San Francisco Bay Area detached, existing single-family home sales experienced a 36.9% drop between January 2022 and January 2023. (Source: C.A.R.)
6) The San Francisco Bay Area detached, existing single-family home sale price saw a 14.6% decline year-over-year from $1,171,000 in January 2022 to $1,000,000 in January 2023. (Source: C.A.R.)
The COVID-19-era housing hot spots — such as Boise, Idaho; Austin, Texas; and the San Francisco Bay Area — had their detached, existing single-family home prices rise and fall by double digits. In February 2023, home prices in many areas receded to pre-COVID-19 rates. Plus, the homebuyer shock of rising interest rates in the second half of 2022 diminished. In addition, the historically low housing inventory and unemployment numbers also prompted homebuyers to visit open houses in February rainstorms. Basically, you should grab an umbrella and join them.
Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the best move. Contact him today, Realtor Pat Kapowich, a career-long consumer-protection advocate.
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