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Southern California Housing Market Update
What’s Happening with Jobs, Mortgage Rates, and Housing Sentiment
The latest U.S. job growth report has surprised financial markets, dampening hopes for an aggressive interest rate cut by the Federal Reserve in November. As a result, bond prices have dropped, leading to a rise in yields and a jump in mortgage rates—now back to their highest point since early August. Despite strong job growth in September, there are signs that the labor market is starting to cool. This means that while mortgage rates have spiked temporarily, we can expect them to stabilize and gradually decline as we approach the end of the year. A steep drop in rates, however, remains unlikely.
Job Growth Surges, but Rate Cuts May Be Slower
The U.S. economy added 254,000 jobs in September, surpassing expectations, with the most significant gains in leisure, hospitality, healthcare, and government sectors. Although other sectors like manufacturing and professional services showed signs of slowing, the unemployment rate dipped to 4.1%. The unexpected strength in the labor market likely means the Fed will hold back on a significant rate cut in November. A quarter-point reduction is still on the table, but the previously anticipated 50-basis-point cut seems less likely.
Mortgage Rates Climb, Stabilization Expected
Following the release of the stronger-than-expected jobs report, mortgage rates spiked, with the 30-year fixed rate jumping to 6.62%. While this is the highest rate since August, the good news is that rates are expected to stabilize in the coming weeks. Financial markets have already adjusted to the Fed's more cautious approach, so we should see a gradual decrease in rates through the end of the year, though a sharp decline is unlikely.
Housing Sentiment Reaches a Two-Year High
Consumer optimism about the housing market has been improving, with Fannie Mae's Home Purchase Sentiment Index reaching its highest level in over two years. A record 42% of consumers expect mortgage rates to fall over the next 12 months, which has driven up confidence in home buying. The share of consumers saying it's a good time to buy has increased, particularly among renters—suggesting more first-time homebuyers may be entering the market soon.
Construction Activity Slows, but a Turnaround is Coming
In August, U.S. construction spending dropped for the third consecutive month, mainly due to declines in new single-family and multifamily housing projects. While builders are being cautious due to high interest rates and operational costs, the expectation is that as mortgage rates stabilize, construction activity will pick up again in the coming months, especially as housing demand continues to rise.
Apartment Rents Dip Nationwide, but Recovery Expected
Apartment rents have continued to decline nationwide, with the vacancy rate at its highest point since August 2020. In California, the median rent fell slightly to $2,169 last month, a dip of 0.4% from 12 months ago. With more apartment units expected to come on the market by year’s end, rent growth is likely to remain soft through 2024 but should improve as inventory levels normalize.
If you have any questions about how these trends could affect your home buying or selling decisions, feel free to reach out!
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700 E Ocean Blvd #1706
Long Beach 90802
2 Bed | 2 Bath | 1080 SF | $940,000
Experience luxury coastal living with breathtaking ocean views from every room in this beautifully remodeled high-rise condo at the iconic International Tower. This light-filled unit features an open floor plan, updated kitchen with sleek cabinets, marble countertops, and stainless steel appliances, and a spacious primary suite with a luxurious soaking tub. Enjoy panoramic vistas from the large wrap-around balcony, plus access to top-notch amenities, including a pool, fitness center, and 24-hour security, all just steps from the beach and vibrant local dining.
OPEN HOUSE
Saturday 10/12 12:00 - 3:00 pm
Sunday 10/13 12:00 - 3:00 pm
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225 W 6th St #515
Long Beach 90802
1 Bed | 1 Bath | 547 SF | $339,000
Charming top-floor end unit condo in the heart of Long Beach, offering privacy and city views. This updated home features an open living area with a private balcony, a stylish kitchen with butcher block countertops, and a bright bedroom with two mirrored closets. Located near top attractions like the Long Beach Convention Center and Shoreline Village, with easy access to dining, shopping, and transportation.
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1187 E 3rd St #111
Long Beach 90802
2 Bed | 2 Bath | 1039 SF | $2,650
Looking for the perfect beachside home? Look no further than this beautiful two-bedroom, two-bathroom condo located in Alamitos Beach! Just six blocks to the beach, this home is perfectly situated for those seeking a coastal lifestyle.
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939 E Appletong St #8
Long Beach 90802
2 Bed | 2 Bath | 900 SF | $2,500
Discover this delightful top floor condo in the heart of Alamitos Beach. Just steps from the beach, East Village, Retro Row, and Shoreline Village, this two-bedroom, two-bathroom gem offers a cozy and inviting living space.
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488 E Ocean Blvd #P9
Long Beach 90802
1 Bed + Bonus Room | 1.5 Bath | 1447 SF | $799,900
Experience Luxury Living with Breathtaking Panoramic Views in this Rare Two-Story Penthouse! AMAZING VIEWS!! Discover unparalleled luxury in this stunning 18th & 19th-floor penthouse in the prestigious Aqua high-rise building in downtown Long Beach.
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3503 Marber Ave.
Long Beach 90808
3 Bed | 2 Bath | 1553 SF | $1,050,000
Impeccable South of Conant Home on a Beautiful Tree-Lined Street! This charming 3-bedroom, 2-bath home in a highly sought-after neighborhood exudes curb appeal with designer touches throughout.
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2101 E 2nd St #205
Long Beach 90803
2 Bed | 2 Bath | 1064 SF | $689,900
Enjoy the ocean breeze in this beautiful condo located just 2 blocks to the beach and across from Bixby Park. Walking distance to the beach, Retro Row, Broadway Ave, dog park, Farmer’s Market, and all the great local restaurants, cafes, and nightlife.
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6815 E Monlaco Rd
Long Beach 90815
3 Bed | 2 Bath | 1254 SF | $995,000
Welcome Home to Modern Elegance in the Heart of the Plaza Area, Long Beach! Nestled in the highly sought-after Plaza neighborhood, this newly updated 3-bedroom, 2-bathroom residence invites you to experience the perfect blend of contemporary comfort and classic charm. Step inside to discover a thoughtfully designed living space that seamlessly combines style and functionality.
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6713 E Almada St
Long Beach 90815
4 Bed | 3 Bath | 2136 SF | $1,174,900
Welcome to Your Dream Home in Los Altos! This stunning 4-bedroom, 3-bathroom, 2-story home is a rare find in the highly sought-after Los Altos community. Conveniently located near Belmont Shore, this home offers easy freeway access, making commuting a breeze. You'll be close to parks and highly rated schools, perfect for families and outdoor enthusiasts alike.
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6600 Warner Ave #182
Huntington Beach 92647
1 Bed | 1 Bath | 765 SF | $425,900
Highly sought after top floor condo at Villa Warner iin Huntington Beach! This beautiful condo offers plush carpeting, smooth ceilings, recessed lighting, large living room with sunny balcony! Villa Warner is a gated community and offers a large pool, spa, cooking area, weight room, billiards room, Extra storage, close to the Ocean, shopping & restaurants.
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525 E Seaside Way #1508
Long Beach 90802
2 Bed | 2 Bath | 1030 SF | $790,000
Enjoy breathtaking ocean views from the living room, bedrooms and the patio in this modern luxury 2 bed, 2 bath highrise condo. Short distance to the beach, harbor, Shoreline Village, Terrace Theater, restaurants, nightlife, and so much more!
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