Urban condo with floor to ceiling windows and ocean view

Recent economic data demonstrates that the U.S. has consistently out-performed the more gloomy outlooks that called for slower growth in 2023. While a stronger economy has, thus far, meant upward pressure on mortgage rates, the average 30-year fixed-rate mortgage remains below 7% where it has been since early December. This has helped to thaw the housing market, which has seen pending sales rise for the first time since rates hit bottom in early 2021. However, as the rebound in housing demand has yet to be accompanied by an equal (or greater) supply response, the market in California is quickly becoming competitive once again as fewer sellers are reducing prices and the median price continues its upward trend that began last summer.

 

Mortgage Rates Are Still Below 7%: Despite a relatively upbeat GDP report last week that had the economy expanding at a 3.3% rate to close out 2023, mortgage rates remained below 7%--continuing the rally that began in December following the Federal Reserve’s latest meeting. Inflation continues to trend down and that has bolstered hopes that the Fed is through raising interest rates and will begin to make cuts to the Fed Funds Rate later this year. This should help to bolster home sales during the spring and summer months as gradually declining rates help to slowly alleviate the “lock-in” effect that many homeowners currently feel as a result of their historically low rate on their existing mortgage. Although many homeowners are below 3%, the ones with 5% rates or higher will begin to see the financial disincentive for moving dissipate as rates slowly creep downward.

 

Pending Sales Rising Year-to-Year in January: Although December marked a new low for existing single-family transactions for California, pending sales through the weekend ending January 28th show pending home sales rising on a year-to-year basis for the first time since the spring of 2021. The recent reprieve on 30-year fixed-rate mortgages from over 8% to consistently below 7% over the past month has helped to bring buyers back off of the sidelines. However, new listings remain relatively depressed and the market is becoming more competitive as demand outpaces the supply response to lower rates. The percentage of active listings that have reduced prices fell for the 8th week in a row last week and prices look to be on track for their 7th increase in a row when the January numbers become finalized next week.

 

Fewer Sellers Locked-In Below 5%: According to data from the National Mortgage Database, the percentage of Californians with an interest rate below 4% has shrunk for the 6th consecutive quarter after peaking during early 2022. As of the third quarter of 2023, there were 67.9% of the mortgages outstanding at or below 4%--down from nearly 72% 18 months prior. At the same time, the percentage of mortgages at a 5% interest rate or higher has climbed for the 6th quarter in a row. Despite the relatively low level of transactions, the sales closed during the past two years have helped to put a growing number homeowners in rates that are closer to current market rates and that should begin to help with housing inventory as we enter the spring homebuying season.     

 

New Home Sales Back Up: After dropping by 9% during November, new home sales bounced back and almost erased the previous month’s decline—rising by 8%. As existing housing stock remains very tight, home builders are taking advantage of the recent reduction in mortgage rates that has brought more buyers back to the market following a quiet holiday homebuying season. Unfortunately, new home sales in California are unlikely to be leading the charge as new single-family construction has been very depressed in recent years, but it is a hopeful sign that demand for housing persists, which will help to motivate more builders to take on new projects and add much-needed supply to housing stocks across the nation.

 

If you have any questions or would like personalized advice regarding the current market conditions, please feel free to reach out. Your success in real estate is my top priority.

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For Sale

8738 Belmont St.

Bellflower 90706

3 Bed | 2 Bath | 1,276 SF | $699,000

 

An incredible opportunity awaits with this charming 3-bed, 2-bath single family home. Set on a spacious 7,004 sq ft lot, that beckons with endless possibilities for entertaining or even possibly adding an ADU. 

 

3825 Linden Ave. 

Long Beach 90807

3 Bed | 2 Bath | 2,142 SF | $1,250,000

 

Charming 1933 Spanish Stucco with many original features. This single story home is situated on one of the prettiest streets, walking distance to to both Atlantic Avenue and Long Beach Blvd. 

In Escrow

2512 W Beachy Pl Long Beach 90815

3 Bed | 2 Bath | 1,695 SF | $875,000

 

Embrace the charm of this lovingly maintained single-story home, cherished by the same family for over 50 years. Nestled on an expansive 10,948 sq ft lot, this property beckons with endless possibilities – from adding an ADU, a pool, more living space, or just simply reveling in the serene, park-like ambiance.

Recently Sold

2174 Stanbridge Ave

Long Beach 90815

3 Bed | 2 Bath | 1,489 SF | $905,000

 

Nestled in coveted Los Altos... known for being pet & people friendly with awesome schools, parks, walkability & more! This immaculate & inviting 3 bedroom/2 bath home with its upgraded kitchen, baths, living room as well as spacious family room will go fast!

807 Delaware St

Huntington Beach 92648

4 Bed | 5 Bath | 3,237 SF | $2,605,000

 

Tesoro Builders has created another extraordinary opportunity to own a brand new, custom designed single-family home in the heart of highly coveted downtown Huntington Beach. The epitome luxury living offers an exceptional beach lifestyle.

5417 Bonfair Ave

Lakewood 90712

4 Bed | 2 Bath | 1,746 SF | $950,000

 

Welcome to this recently updated 4 bedroom, 2 bath two story home located in the heart of Lakewood.

251 Elm Ave. 

Long Beach 90802

2 Bed+Den | 3.5 Bath | 1,750 SF | $915,000

 

This exceptional modern townhome at The Huxton built in 2018 boasts 2 bedrooms, a den/great room, and 4 baths spanning 1,750 square feet. The large rooftop deck off the top-floor den/great room provides an exceptional indoor/outdoor living experience.

2059 W 160th St.

Torrance 90504

2 Bed | 1 Bath | 837 SF | $780,000

 

Discover Your Dream Home in North Torrance! This charming 2-bedroom home is nestled on a serene residential street, offering you a remarkable opportunity to own in this sought-after neighborhood with great schools.

781 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 2,067 SF | $1,225,000

 

Stunning 3-bed, 2-bath home with breathtaking ocean views in Coastal San Pedro. Experience the beauty of the ocean from the front yard, primary bedroom, and the expansive backyard.

773 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 1,040 SF | $955,000

 

Enjoy beautiful ocean and harbor views from the front yard, living room, and the expansive backyard. This 3-bed, 2-bath home offers even more possibilities with an additional enclosed patio area currently staged as a family room and game room.

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Tim Majka

(562) 900-9430

www.ImagineRealty.com

 

DRE #01399855