Finally, the numbers are reflecting what I’ve been feeling in the market with prices dropping both YoY and MoM. Surprisingly, closed sales increased quite a bit MoM, despite the market feeling very slow. With mortgage rates falling to the lowest levels in 12 months, we will see if that helps with the momentum.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for Sale |
+21% |
FLAT |
|
New Listings |
+3% |
-6% |
|
Homes in Escrow |
-5% |
-2% |
|
Closed Sales |
+1% |
+9% |
|
Median Sale Price |
-2% |
-3% |
It was again the sluggish condo market dragging down prices YoY, with house prices up 2% YoY. Condo prices were down 8% YoY. Homes for sale were flat MoM for the second consecutive month as inventory continues to be an issue for buyers, and I discuss this in further detail below.
Inventory
June saw the largest number of delistings across the country. Delistings are homes that couldn’t sell, so the seller decided to take them off the market. A lot of this is due to sellers expecting crazy prices for their homes, and they have just now realized that buyers aren’t paying those prices. Year to date, delistings are up 35% from the same period in 2024, and there were more homes pulled from the market than were added. This partially explains why homes for sale have been flat for two consecutive months here in LA, in addition to the summer slowdown. Time will tell how many of those delistings re-enter the market in September when the last push for the year begins.
Mortgage Rates
The big news now that not everyone is aware of is how low interest rates are, with some lenders offering rates in the 5%’s again. Most people would have heard that the Fed is holding steady and think that was it, rates aren’t changing. And for short-term rates, that is the case, but mortgage rates are different. The day after the Fed spoke, unemployment data was released that not only showed an increase in July, but we also saw a substantial revision to the prior two months. This caused the bond market to react heavily and the 10-year treasury to plummet. This, in turn, immediately caused mortgage rates to drop. This is because investors are now certain that the Fed will cut rates in September, and investors are always looking to the future. The Fed doesn’t meet in August, so September is the soonest it can happen. Unless something else major happens to the economy that spooks the bond market again, it’s unlikely that mortgage rates will drop further after the Fed announcement. However, that’s a long way from now, and as we’ve witnessed already this year, it’s anyone’s guess what will happen next…
Palisades
We’ve seen a noticeable uptick in activity in the Palisades. Lots that have been sitting for months, all of a sudden have an offer, and in some cases, multiple offers. It’s uncertain if we have hit the bottom and prices will start to increase. It will be especially hard to know as we head into the holiday season, when activity is sure to slow down.
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