Prices decreased both MoM and YoY for the second consecutive month. We also saw the typical Summer slowdown, but with closed sales declining MoM a lot more than the previous two years.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for Sale |
+15% |
-6% |
|
New Listings |
-5% |
-15% |
|
Homes in Escrow |
-8% |
-10% |
|
Closed Sales |
-7% |
-9% |
|
Median Sale Price |
-2% |
-3% |
This month was a reversal of other months this year, with house sales playing the biggest part in prices falling MoM, compared to condos. House prices dropped 6%, although that could be partly due to July having some big sales, including the sale of The Spelling Manor for $110M, which would have skewed the numbers.
Inventory
For most of the year, we have been noticing the constant increase in inventory, and this has been playing a part in buyers waiting on the sidelines, expecting prices to come down as choices increase. However, August was noticeably different. August not only saw the biggest MoM decrease, but it also saw the biggest decrease YoY. For most of the year, inventory was increasing YoY in the mid 20%’s, with August only having a 15% increase. You could argue this is seasonal. However, August in 2023 and 2024 didn’t see this same major change. Not only that, new listings saw a big drop MoM. Even in the years preceding the pandemic, we haven’t seen a decrease of this scale for new listings in August. We have seen a steady flow of new inventory since Labor Day, so we will need to wait and see if this inventory squeeze can be turned around.
Mortgage Rates
Employment numbers are having a big effect on mortgage rates as job numbers not only continue to get revised, but the outlook is increasingly bleak. Employment, along with inflation, is what investors are watching closely. With the Fed meeting on Wednesday, most are still betting on a 1/4% cut, with a small chance of a 1/2% cut. More than likely, mortgage rates won't move much based on this. However, they could move if Powell says something that triggers investors. Additionally, there is the wildcard of whether the tariffs will be reversed, and if they are, the US will need to return the money it collected from the countries to which the tariffs were applied. The Supreme Court won’t hold any hearing on this until November, but expect mortgage rates to increase if the money has to be returned. The 30-year jumbo remains the lowest it's been in twelve months.
Palisades
There was a 60% increase in closed sales MoM, proving the increase in activity we had been feeling was real. Prices remained flat, and it’s too early to tell if prices have bottomed out.
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