Prices returned to increasing MoM after the market was on an extended summer break. House prices increased 7% YoY, the biggest yearly increase since May. Condo’s only saw a 2% increase YoY as that market continues to be sluggish.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for sale |
+26% |
FLAT |
|
New Listings |
+9% |
-9% |
|
Homes in Escrow |
+18% |
+4% |
|
Closed Sales |
+16% |
+15% |
|
Median Sale Price |
+5% |
+3% |
That’s a big increase in closed sales compared to previous months and most likely was the last push of the year before we go into the typical holiday slowdown. My report is a bit late this month as I wanted to see if the election would have a direct impact right away, and so far not much has changed. It feels mostly the same as before.
Prices Surprised Me
Myself and most agents I speak with on the westside have been experiencing the same extremely slow market, so I was surprised to see prices and activity increase as much as they did. Especially considering I have been watching most properties sell below the asking price. The election and high interest rates put almost everyone in a holding pattern. On the flip side, I was chatting with an agent who works in NE LA, and he said it’s been very active. The map area I use to pull data covers greater LA and down to the South Bay, and it appears, as with most of this year, that the market is very sporadic, and there isn’t a blanket answer for the market we’re in.
Interest Rates
As expected, the Fed dropped the Fed Funds Rate again last week, this time by .25%. However, unlike last time, mortgage rates dropped quite a lot. Unfortunately because rates shot up so much after the election result, it meant mortgage rates mainly remained the same as the start of the week. With the proposed new policies Trump hinted at during campaigning, most economists predict it will now take longer for mortgage rates to decrease. However, predicting mortgage rates is impossible, so we must wait and see what happens.
The Election
Now that the election is behind us, I’m not sure what will happen next. We saw mortgage rates shoot up the very next day as the bond market reacted heavily to the results and mortgage rates suffered. Only to have mortgage rates sharply drop after the Fed announcement to drop the Fed rates a few days later. Add in the stock market going up like crazy and Bitcoin at record highs, we remain in a very weird time right now. There was the hope of a pop in activity after the election and before the holidays settled in, but for now, we’re not seeing anything. Admittedly, it’s only been a week. However, we only have two more weeks until Thanksgiving, so there’s not much time left before everyone starts checking out for the year.
Best Time to Get a Deal
The end of the year is always the best time to get a deal, even more so this year, given we’ve been in an extended sluggish market. The trick is finding the sellers who are motivated to sell. However, you’ve got nothing to lose except the time it takes to submit the offer. And if you’re concerned your monthly costs are going to be too high because of interest rates, ask the seller for a credit to buy down your rate. I have a buyer who just did this, and they are saving roughly 15% each month for the first year.
