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This week’s economic data continues to suggest the U.S. economy is only gradually losing momentum. Consumers continued to spend, albeit at a slower pace, and industrial and housing activity are seeing some stabilization. Homebuilders’ sentiment pulled out of negative territory for the first time in nearly a year as buyer incentives and other factors made it easier to sell the overstock of new homes. Consequently, residential construction picked up and builders even increased single-family permits. The resale market in California, however, had a tough month in April as sales took a step back despite competition heating up. A lack of new listings, due to the ‘lock-in effect’, kept the existing inventory of homes for sale limited which drove prices higher just after California had seen an improvement in affordability at the start of the year.
Higher mortgage rates and low housing inventory restrain California home sales in April: The market had another rough month in April in terms of sales, as the sales-pace remained below the 300,000-units for the seventh consecutive month. The number of homes sold dipped both from the prior month (-4.7%) and from the same month of last year (-36.1%), while supply remained tight and mortgage rates stayed elevated. Closed sales, however, should see a bounce back in May as more transactions opened escrow in April. Meanwhile, market competition continues to heat up and applies upward pressure on home prices. The statewide median price climbed back above $800k for the first time in six months and is expected to increase further in May and June as the market enters its typical summer homebuying season.
Housing affordability in California rises to highest level in a year during first-quarter 2023: Housing affordability in California improved at the start of the year, with the statewide index for existing single-family home inching up to 20% in Q123, the highest in the last four quarters. A combination of slightly lower mortgage rates and cheaper prices led to an improvement in housing affordability over the previous quarter. However, mortgage interest rates were still nearly two-thirds higher than a year ago and as a result the state housing affordability index (HAI) remained four percentage points below Q122. The monthly mortgage payment for a median-priced home (including taxes and insurance) dipped 6.4% from Q422 but jumped 19.2% from Q122 as the effective mortgage rate surged from 3.97% in Q122 to 6.48% in Q123. With interest rates near the highest level in the past 16 years, housing affordability will remain a challenge for many homebuyers in the coming quarters.
Housing starts advance in April as home builder sentiment improves: Home building appears to be perking up a bit. Total housing starts rose 2.2% to a 1.4 million-unit pace in April. Both single-family and multifamily starts advanced solidly during the month as warmer weather and fewer issues obtaining building materials supported residential construction. Although housing starts were revised down for prior months, the pace of residential construction has been improving on trend so far this year. Despite single-family construction continuing to run at a sluggish pace, it appears to be on the rebound as single-family permits also increased for the third consecutive month. The uptick in construction and especially the plans for future construction (permits), are likely a result of builders gaining more confidence in the market as rate buy-downs, price discounts and other incentives, combined with low resale inventory have increased sales of new homes.
Hope everyone has a great Memorial Day weekend! If you have any real estate questions or would like to discuss if now is a good time to buy or sell, please feel free to contact me.
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1007 Catalina Ave #108
Redondo Beach 90277
2 Bed | 2 Bath | 1,181 SF | $1,249,000
Welcome to Your Dream Beach Home! A Stunning 2-Bedroom Condo located 1 block to the beach.
Open House
Today 4-7pm,
Saturday & Sunday 12 - 4pm
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985 S. Idaho Ave. #60La Habra 90631
2 Bed+Den | 2 Bath | 1,073 SF | $489,000
This 2 bedroom plus a den (currently being used as a 3rd bedroom) is tucked away in a peaceful serene location surrounded by beautiful trees in the Woodlake Villas of La Habra.
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2217 Westwind Way
Signal Hill 90755
4 Bed | 4 Bath | 3,516 SF | $2,495,000
Stunning panoramic views from this custom hilltop home, nestled at the end of the cul-de-sac on a double corner lot. Amazing city and ocean views from Newport Beach to the skyscrapers of downtown LA.
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7887 Lampson Ave #54
Garden Grove 92841
2 Bed | 2 Bath | 800 SF | $99,900
Beautifully updated 2 bedroom, 2 bath home in Garden Terrace Estates.
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5250 E. Lomita Ave.,
Orange 92869
32,924 SF of Residential Land | $650,000
Located on a private street with custom homes, this 32,924 SqFt lot comes with plans for a 5000+ SqFt custom home featuring amazing views.
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256 Hermosa Ave
Long Beach 90802
2 Bed | 1 Bath | 780 SF | $479,000
Nicely updated 2 bedroom condo in Alamitos Beach, close to Bluff Park, and just a short walk to the beach, Bixby Park, cafes, nightlife, and great restaurants.
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199 Prospect Ave
Long Beach 90803
5 Bed | 3 Bath | 2,557 SF | $1,878,000
Stunning 4 bedroom, 2 bathroom Belmont Heights Tudor with a nicely-sized Guest Quarters/Rental Unit/Home Office above the 2-car garage!
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200 S. La Fayette Park Pl. #1
Los Angeles 90057
1 Bed | 2 Bath | 1,990 SF | $775,000
Great corner unit 1 bedroom, plus den and loft townhome located close to Korea town, DTLA, and Silverlake.
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100 W. Louise St.
Long Beach 90805
3 Bed | 2 Bath | 1,031 SF | $545,000
Great opportunity to own this 3 bedroom, 2 bath single family home on a corner lot. Bring your imagination as this fixer has so much potential.
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5221 E Patterson St.,
Long Beach 90815
4 Bed | 2 Bath | 1,627 SF | $870,000
Wonderful home in the Stratford Square area of Long Beach. Lovely neighborhood known for its award winning schools.
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939 Appletone Ave #3
Long Beach 90802
1 Bed | 1 Bath | 640 SF | $355,000
Nicely updated top floor end unit 1 bedroom 1 bath condo in the heart of Alamitos Beach just a short walk to the beach.
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939 Appletone Ave #8
Long Beach 90802
2 Bed | 2 Bath | 900 SF | $453,000
Charming two bedroom two bathroom condo sits in a prime location, just blocks away from the popular Alamitos Beach, Shoreline Village, Pike Outlets, 4th Street's Retro Row, Downtown Long Beach, and more
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64 Corona Ave.,
Long Beach 90803
3 Bed | 3 Bath | 1,532 SF | $1,550,000
Amazing single-story bungalow on an oversized lot located less than a block to the ocean in the heart of Belmont Shore!
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2204 Conquista Ave.,
Long Beach 90815
4 Bed | 3 Bath | 2,629 SF | $1,075,000
Beautifully upgraded 4 bedroom, 3 bathroom home in the highly desirable Los Altos area of Long Beach. This spacious two-story pool home is perfect for entertaining.
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6490 E Saddle Dr
Long Beach 90815
3 Bed | 3 Bath | 2,845 SF | $1,720,000
Presenting this Amazing turnkey opportunity to live in Bixby Hill's 24 hr gated community. An entertainers paradise with your own oversized pool w/ beautiful waterfall.
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