Prices increased MoM, with house prices up, and the condo market also rebounded after a terrible January. Prices are still down YoY, so it will be interesting to watch how prices evolve as the Spring Selling Season starts.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for Sale |
-3% |
+1% |
|
New Listings |
-13% |
-18% |
|
Homes in Escrow |
-10% |
+1% |
|
Closed Sales |
-10% |
+11% |
|
Median Sale Price |
-7% |
+5% |
It’s been typical over the past few years to have a big increase in inventory in January, then a drop-off in February, then a pick-up again in March, and it looks like a repeat of that this year.
Movement in the Market
There's definitely been movement in the market over the past few weeks. Homes that couldn't sell last year are all of a sudden selling now. Some homes hitting the market are entering escrow within a couple of weeks. Even though the year-over-year numbers aren't super encouraging, it's interesting because what agents are feeling in the market is different from what the numbers show. It could be that the market is still very selective about what sells and what doesn't, and therefore, it isn't reflected collectively in the numbers. We'll have to watch this space closely to see if the numbers start to show what we're feeling in the market.
Interest Rates
The 30-year fixed rate dropped to 5.99% for a few days until the war broke out, spooking investors. What's interesting here is that, historically, when wars break out, investors tend to flock to the security of the bond market, which pushes the 10-year yield down and, in turn, the 30-year fixed down. That didn't happen this time; instead, rates went up as oil prices increased, heightening fears of inflation and potentially stagflation. I started writing this report last week and was going to touch on how the seven-year ARM hasn't been affected by the war, but just a week later, it has been. So, all rates are now trending upward. That's the problem here, and this is why some buyers might decide to hold back: the uncertainty persists. It's important to remember the golden rule with mortgage rates and how they affect monthly payments. That is, a 1% change in mortgage rates will affect a buyer's monthly payments by roughly 10%. Given that 0.1% is considered a big movement on any given day, a buyer's monthly payments will change by only about 1%. So just be mindful of how the media uses these headlines, since negative ones generate more clicks. Therefore, it's important to zoom out and think rationally about your next move rather than getting caught up in the headlines.
Palisades
Inventory held steady last month, as did the number of lots entering escrow. Interestingly, the number of new land listings entering the market dipped between January and February, mirroring the rest of the housing market.
Click below to follow the land market in real-time. It’s an active link that will update with the current day's data.
https://www.themls.com/MarketSnapshot/T/YWFhYWJmamRi
