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Mortgage rates have started trending down for several days after having risen above 7% as worries over the debt ceiling reached fever pitch. And despite higher rates in May, the U.S. labor market showed little signs of cooling down as employers added nearly 340,000 new jobs last month—well above expectations and raises the prospect that the Fed may have to raise rates one more time to help get inflation under control.
Mortgage rates decline after a three week ascent: After three weeks of hikes, mortgage rates did an about-face this week. According to the latest Primary Mortgage Market Survey (PMMS) from Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 6.71% this week, down from 6.79% the previous week.
Exceptionally strong jobs report keeps pressure on the Fed: Despite the Fed’s best efforts to put the brakes on the macro economy with aggressive interest rate hikes, the labor market continues to outperform expectations. In May, there were 339,000 net new jobs created in the U.S. economy, which was well above the consensus forecast. This shows that the labor shortage that began during the pandemic due to both the shutdown of the service sector and early retirement remains stubbornly high. With wage growth playing a significant role in the ongoing battle against inflation, the continued strength of the job numbers keep the Fed in the spotlight as markets wait to see if they will raise rates one more time at their upcoming meeting on June 13-14.
Housing market continues to heat up amidst tight inventory: Despite higher interest rates and rising economic uncertainty, California’s housing market continues to get more competitive as demand outstrips available supply. Sales look to have risen slightly in May, but inventory remains extremely tight. New listings had already begun to decline in May, when they typically increase through the summer before falling off again in the fall and winter. As a result, homes are selling much more quickly than they were a few months ago—a median of 15 days last week vs. 42 days back in January. In addition, more buyers are paying premiums as roughly 50% of all sales closed above list price in the past two weeks after having dipped to just 20% of the market at the start of the year.
New home sales increased for 2nd month in a row: Builders benefited from low inventory of existing homes in April, as more buyers turned to new construction as an alternative. Sales of new homes rose 4.1% to a 683,000 seasonally adjusted annual rate in April - the highest pace since March 2022. That puts new home sales 11.8% higher than their pace one year ago. At the regional level, sales in the West declined 9.1% month-over-month in April, after surging to the highest level in ten months in March. April sales also dipped 2.8% from the same month of last year. Builder incentives continue to motivate buyers towards new construction, but they are becoming less common as housing demand stabilizes and inventory shrinks. Still, the 7.6 months' supply of new homes remains substantially higher than the 2.9 months' supply of existing homes.
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 story, 2 bedroom, 2 bath condo located half a block to the beach. Beautifully updated throughout with dramatic high ceilings, gorgeous kitchen, and an abundance of natural light and open space. OPEN HOUSE SUNDAY 1 - 4pm
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211 Saint Joseph
Long Beach 90803
3 Bed | 2 Bath | 1,057 SF | $1,299,000
Welcome to this charming Belmont Shore home located just 4 blocks to the beach! Enjoy the open concept floor plan, granite countertops, hardwood flooring, and a serene primary suite with a spa-like bathroom. Don't miss this opportunity for coastal living at its finest!
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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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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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256 Hermosa Ave
Long Beach 90802
2 Bed | 1 Bath | 780 SF | $475,000
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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