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Housing market slowing down after record-setting year

real estate
Posted at 6:39 PM, Oct 25, 2022
and last updated 2022-10-25 22:41:44-04

The housing market is slowing down after a record-setting year in 2021.

"The market was, it was like doing 200 mph down the freeway, seeing highway patrol on the side, hitting the brakes, and slowing down to about 100 mph," said Robert Mariani, a realtor at Mariani Realty.

Rising interest rates are contributing to the slowdown.

"Interest rates have doubled from where they were at last year at this time. However, experts across the board are all predicting home prices to continue to rise," said Mariani.

Communities across San Luis Obispo County are running into the same problem - a lack of inventory.

"Because really we just don't have inventory. We have more buyers than we have homes available," said Mariani.

"Cambria's a little different than most of San Luis Obispo County. We're definitely seeing a slow down. We're not seeing inventory come on the market in the way we need it," said Joe Prian, RE/MAX Pines by the Sea broker and owner.

Prian says despite the high interest rates, they still have plenty of buyers, especially those looking for a second home, "but without inventory we don't have much to sell," he added.

High interest rates are pushing many first-time home buyers out of the market.

"I recently had a pre-qual letter come in for an offer on a listing that I have and that pre-qual letter had a not-to-exceed interest rate of 7.99%," said Prian.

Prian says it is highly likely that buyer will be pushed out of the market if interest rates continue to rise.

"So if the interest rates go above that, then it drops that buyer out of the market for the season until hopefully interest rates come back down," said Prian.

He says it's not a bad idea to wait to buy.

"For those that are borderline with their mortgage payments and their interest rates, taxes and all of that, uh, yeah, wait," said Prian.

Though he says he can't predict exactly how long, Prian says interest rates will eventually go down.

Prian says for those looking to come to the coast, it's always a good time to buy because property value on the Central Coast will likely continue to increase.