South Pasadena Real Estate Update

Anyone who has followed the real estate market in Southern California is aware that mortgage interest rates have increased rapidly over the past year. In January of 2022 the rate for a 30 year fixed rate mortgage was 3.22 percent. By November of 2022 those rates had increased to 7.08 percent. The cost to borrow for a home had more than doubled!

According to government data the 30 year fixed rate mortgage was running around 6.71 percent at the end of June 2023.

In order to have a healthy real estate market, there need to be active buyers and active sellers. Since interest rates have risen so far and so fast, the situation is this:

Anyone who could refinance a home prior to the middle of 2022 – did so. The interest rates on these refinanced properties are generally well below 4 percent (some local homeowners are even holding mortgages below 3 percent). Now those same potential sellers see their options as – either sell now and then re-buy another home with an interest rate that is (nearly) double – or sit tight and wait for interest rates to come down.

Guess what those potential sellers are doing?

They are sitting tight on a very low interest loan in a house they can (most likely) afford. They simply aren’t as motivated to sell at the moment. In fact, across the U.S. the inventory of new listings for May 2023 hit an all time low.

So what influence is this having on the number of homes currently for sale in South Pasadena real estate? Surprisingly, there are more homes for sale in South Pasadena at the moment than at any time since the pandemic. In the past few years the average number of single family homes for sale in South Pasadena has ranged from less than 10 to around 15 homes on the high side.

As of the publishing of this article there are now 23 single family homes for sale in South Pasadena. The prices range from a low of $899,000 for a modest 2 bedroom home on a petite lot to $7.9 million for a 7,500 square foot home with 7 bedrooms on a large 31,000 square foot lot.

So the quick update is that housing inventory is generally quite low at the moment, however South Pasadena real estate is bucking that trend by offering an unusual opportunity to choose from a relatively large number of properties for sale.