Published October 6, 2025

October 2022 Real Estate News

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Written by Owen & Camille Schwaegerle

October 2022 Real Estate News header image.

{original post 10/18/2022}


Hello! Thanks for tuning in to this month’s newsletter. It’s our goal to bring valuable real estate content and local updates to you, so we hope you enjoy it! ☺️??

In this e-newsletter, we will dig deep into how the rising interest rates and inflation are affecting the real estate market and share a few of the biggest opportunities for purchasing in this market. We also have a special promotion to get a FREE pest inspection on your home for preventative maintenance!  

The Schwaegerle Team strives to educate and empower all people on the ins and outs of real estate, so thank you for tuning in and following the team on social media!
The Market Shift 

We are in a market shift. While some say the market is going to crash, real estate experts and economists alike recognize that the market is shifting towards a more balanced market, not a crash and burn. 
 
What does a shift look like? Well, prices are softening due to less demand. There are a number of homebuyers wanting to purchase, and unfortunately, buyers are slowly getting pushed out of the market due to rising rates. Major metros on the West Coast have seen home prices drop or diminish, which is actually providing a lot of relief for people buying or investing in those markets. Inventory is sitting longer, homes are getting fewer offers, and sellers are getting antsy. Fear is starting to creep into this market, which actually creates great buying opportunities! 
 
We’ve successfully helped homebuyers negotiate massive price reductions, repair requests, and closing cost credits in the last six months. Some sellers are even willing to sell their homes furnished to make the sale go through for the buyers. In the last few years, we haven’t seen buyers have this much negotiating power to get the price and terms they want for their home. This is definitely an exciting time in real estate!
 
With the rise of interest rates, our new motto is: Date the rate, marry the house! We are encouraging buyers to not let the rising rates stop them from buying the home that their family needs or moving forward with an investment opportunity, as long as they can comfortably afford it. 
 
If you are planning to hold onto your new home for a few years and not sell, you are better off than if you are planning to flip a property in the short term. Economists predict that rates will most likely drop in 3-5 years, so it will be wise to refinance into a better fixed rate at that time. As we have all seen from the past few years, when rates decrease, home prices soar. Now’s the time to get the price and terms you want. Refinancing is always an option down the line.
A Quick Dive into What Higher Interest Rates Mean for Buyers and Sellers
By: Roberto Delgado
 

(Federal Reserve, 2022)

The FOMC (Federal Open Market Committee) sets target interest rates in the United States with the dual mandate of inflation stability and maximum sustainable employment. When inflation increases too quickly, the Fed will increase interest rates, just as we saw a .75% increase on September 21, 2022. In the dot chart above, we also see interest rate expectations of all FOMC members for the next couple of years in an effort to cool inflation and aggregate demand. What does this mean for buyers and sellers? 
 
These rate hikes should lower demand in housing and therefore lower housing prices as higher mortgage rates produce higher debt servicing costs. While the number of home sales has fallen for seven months straight and mortgage rates are the highest since 2008, mortgage demand continues to increase and housing prices are still elevated. As mortgage rates continue to increase, however, we should see housing regress to prices, “more closely in line with rents and other housing market fundamentals" (Jerome Powell).
 
Jerome Powell, chairman of the Fed, is looking for a ‘reset’ of the housing market. He says, "For the longer term, what we need is supply and demand to get better aligned so housing prices go up reasonably and people can afford houses again."
 
For buyers looking to purchase in the next few years, this report emphasizes that the quicker you lock in mortgage rates, you should expect lower rates. Conversely, it may be a sound strategy to then refinance as we see interest rates return to better rates in the next couple of years to come, as illustrated in the dot chart. 
 
For sellers, these higher debt servicing costs will reduce housing prices, which is Powell’s goal to make housing more affordable again. If you are looking to move soon or are looking to cash out on investment property, now may be the time to get the highest price for your property in the short to mid term.
Untangling Interest Rates, Inflation, and Supply and Demand

What determines pricing? Econ 101 taught us price is always, always determined by supply and demand. Interest rates and inflation are having an impact on the demand side of the equation. With the Federal Reserve committing to combat inflation, they have stated they will not stop raising rates until they get inflation under control. Rates will continue to rise, whether or not it triggers a recession, causes unemployment, or causes housing prices to dip. However, as the dot plot map above shows, almost all parties believe that raising rates is necessary to curb inflation. Once inflation is under control, they will most likely be dropping the rates back down, which will create a surge in new buyers rushing into the market further pushing prices up. Therefore, we are encouraging people to still buy real estate, invest, and get in the housing market now. Date the rate, marry the house. You can always refinance later.

We would like to address a common misconception around interest rates and real estate housing prices. Rising rates will decrease demand, which can help cool down home price appreciation. If you look at historical trends though, home prices have continued to climb even during periods of rising interest rates. 

Here are a couple infographics to showcase the history of mortgage rates and the history of home prices side by side.



As you can see, throughout history rates have gone up, down, or moved sideways, yet home prices have steadily risen. This is due to natural appreciation, which is more closely tied to inflation than interest rates. 
 
One of our real estate coaches, Brian Icenhower, states, “Housing supply is still very, very low. Appreciation was at around 20% in 2021. All the leading experts are saying we can still expect appreciation at 10-15% this year. Understand, we are also still looking at home prices going up, they just aren’t going up as fast. You will see certain micro-markets where prices are not increasing.” 
 
In SLO County, supply is still low and demand (as depicted by pending sales) is dropping due to the rising interest rates, but home values are still up 12.1% year over year. At the BiggerPockets Real Estate Investing Conference we went to last week, the speakers shared about the wealth building potential of buying and holding real estate long term. Just think back to what people bought homes for 30-40 years ago in your area. Prices have gone up 10-15x since then. Imagine what home prices will do over the next 30-40 years. 
 
As David Greene at the conference joked, “One day 30-40 years from now, we might be saying to each other, ‘How did you get that home for only $25 million?! I haven’t seen anything below $40 million in that neighborhood!’” If you look at the inflation trend over the last two years, it is very likely that prices may get up into more ridiculous numbers sooner than you think! Therefore, make a plan. Buy and invest in real estate. Hold onto it. Sell it when you need to exchange or trade up. There are lots of opportunities to get great deals in this market and in the coming months.
Keep the Creepy Crawlies Out This Fall! 

Pest issues are very common on the Central Coast. Our beautiful coastal weather attracts termites, ants, spiders, etc. into our homes. It’s so important to have a pest inspection done every couple years to ensure your home isn’t getting destroyed by termites. 
 
Our team has partnered with Key Termite and Pest Control to provide a FREE PEST INSPECTION for our friends. All you have to do is give Key Termite a call to schedule an inspection and let them know The Schwaegerle Team sent you! 
 
805-466-2451
 
The Top 10 Household Pests in California are:
1. Ants
2. Termites
3. Cockroaches
4. Rodents
5. Earwigs
6. Millipedes
7. Silverfish 
8. Paper Wasps 
9. Fleas
10. Bed Bugs 

https://www.youtube.com/watch?v=zmOtoqnpIdQ

Ribbon Cutting with the SLO Chamber of Commerce

Last month, we moved into our new office and celebrated our move with the SLO Chamber of Commerce. Thank you to everyone who has supported our team over the years. We wouldn’t be in business if it weren’t for all of the wonderful people we get to work with each day!

https://www.youtube.com/watch?v=vcVg-i9OW28

Let's Be Social
Thanks so much for reading our newsletter this month! We want to hear from you! Please let us know how we can support you on your real estate journey. Whether you just purchased a new home, want to explore home buying options, are curious about what your property might be worth, or just want to know more about the market, please reach out! 

@theschwaegerleteam
@savannahsiador_
@marianovahomes
@closeinslo

You can also follow us on YouTube and Facebook for more updates throughout the month.

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