These two developments signal a very healthy real estate market.
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Today I want to update you on what's happening in the market as we start the year 2023.
First, let's talk about interest rates since they're probably the most important factor in our market. We just got positive news from the Federal Reserve when they made their announcement—It really met the market's expectations, which is always good news. That means the interest rate will hopefully continue to come down a little bit, which is very good for the real estate market. Now we're sitting at just over 6%, which is as low as it has been since around October or maybe September.
This is excellent news because that means we'll likely see an increase in demand as affordability gets better; there will be more buyers coming back to the market. As I mentioned, people will also feel more comfortable because things meet their expectations. People will be more likely to buy, which means more demand. Sellers, this is good news for you. Buyers, this means it may get a little more competitive, but it's still not what we saw in early 2022 or 2021. It's not quite back to that market yet. So good news all around, we're entering a very healthy market, and I'm excited about it.
The second factor we're looking at is housing supply. Now in King and Sonoma County, the inventory has continued to fall. This follows the normal seasonal trajectory, where inventory comes down in the winter and goes up through the spring in the summer. I expect maybe another month of that coming down. So there is a lot of scarcity in the market, but then in March or April, we should see increases happen pretty quickly in the number of homes on the market. For sellers, that means that there's not a lot of competition out there, but demand hasn't come back yet. It's a give-and-take. If you wait until spring or summer, there may also be more competition and more buyers. That being said, on the buyer side, there are not a lot of choices right now, but the other buyers haven't quite come back. There may be opportunities to get houses before there are more multiple-offer situations. However, I am starting to see those a little bit more often, and it's still an excellent opportunity to get something before that competition starts to pick up and at a very good interest rate.
Of course, these are just a few factors that will affect the market. So if you want to talk about the specifics of your situation or area, give me a call or send an email. I’d love to connect with you.