Has the Los Gatos housing market cooled off!?

Yesterday a friend was asking about the health of the real estate market and wondering Real Estate market had slowed!   I commented that the interest rate hikes of last month have certainly killed the refinance boom for good, but I only had marginal evidence that the over-priced homes in Los Gatos are chasing the market.

Well, today with Trulias Price Monitor report the data is in that the July Home Prices declined by 0.3% over the same period last year.   What could be the reason for this decline are :

1) Rising Mortgage Rates:  Decline was fueled in part due to rising interest rates which were blamed on the FED’s announced plans to stop
their purchase of mortgage backed securities.

2) Decline in Investor Demand:  The rise of home prices in the previous quarters have made the market too high for any profit taking.    We saw 3 investors back out of Will Glenn Short Sale listing in July since they were finding much cheaper properties to flip.   Asking prices were only up 3.3% compared to previous quarters which has seen 4.2% increase in April.  

3) More Inventory:  The record rise in prices has encouraged some home owners who were unsure about selling their homes to list them. With more inventory, there are less multiple offers on properties as they were in the previous months.  

We see signs of slow down in the market with some over price homes such as 16600 Englewood Ave, Los Gatos staying on the market more than 60 days where a home on the same street sold in 6 days!  

Are you still looking to buy in Los Gatos!?  Has the rise in interest rates shelved your plans for a Los Gato purchase!?

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