CA Association of Realtors has released the September 2023 Housing Market Statistics. Most of these sales went into contract in August with a 30 day escrow to result in a September closing.
In the Los Angeles County housing market statistics the median price rose 3.7% in September from August and is up from same time last year 2.6% according to the California Association of Realtors. I had anticipated moderate increases to prices and this was just about on target. Ventura County’s prices took a big jump both month to month and year to year.
The total sales month to month dropped 4.5% in Los Angeles County and sharply by 16% in Ventura County. This drop is a result of multiple factors: a continued low supply of homes, increased interest rates and the continuing Writers/SAG strike.
For most of this year supply or inventory was the driving factor impacting the stats but during the last 60 days interest rates moved up to top position.
For August contracts= September sales 30 year fixed interest rates ranged from 5 to 5.66%. Unfortunately for September contracts = October sales the 30 year fixed interest rates increased to 6.7% by the end of the month so the statistics October sales are going to drop. My anecdotal experience is anticipating selling prices to remain steady but volume of sales is going to drop significantly. And October contracts = November sales will drop even further as rates have risen to just under 8%. Unfortunately I think sales volume will stay low through the end of the year and into early January with rates, seasonality, war on multiple fronts, those who would consider selling their home are going to stay in Pause mode and hold tight.
Most industry sources expect interest rates to fall in 2024 based on the expectation that consumer spending will finally slow down allowing the Fed to drop rates. Additionally it will be an election year and the consensus is elected officials won’t want to face the voters with these high rates. It is unlikely we will see 3% rates again but they should settle somewhere around 6% which could bring the market to something near a new normal, hopefully in 2024 and not 2025.
I am generally a proponent of fixed rates because the known about your future payments is regularly better than the unknown. But with the current high rates even I had to review adjustable rates because it seems quite likely that rates will drop in the next 5 years before the rate adjusts allowing borrowers to refinance to a fixed rate long term. But interestingly the adjustable rates from major lenders are not significantly different from the fixed rate. However, one area of opportunity is credit unions because many of them are non-profits and hold or “portfolio” their loans rather than selling them to investors. Credit unions often have few choices in loan options but a better rate could be worth the inflexibility.
Adjustable rates are considered a higher level of risk because of the uncertainty at what the rate will be at the future reset period but for those who are comfortable with risk and confident about future rates it could be a good play.
There may not be much inventory available between now and the end of the year but there could be some good opportunities especially for investors, cash buyers and Buy & Hold buyers because when interest rates drop prices should move up (assuming no major international or broader economic changes).
Who to Call
General real estate agents are great for working on every day transactions but if you are a Senior who is downsizing, a family settling an Estate in Probate or Trust administration or a family in a Divorce you need a real estate professional trained for these cases.
For a free consultation on your home’s value, how to prepare your home to sell or the real estate market in general call me at (818)570-1144 or email [email protected] or visit https://janeybishop.com
SRES, CPE, CPRES, RCSD, CDRE
Senior Real Estate Specialist
Certified Divorce Real Estate Expert
Certified Probate Expert
Certified Probate Real Estate Expert
Real Estate Collaborative Specialist – Divorce
P.s. yes the photo is Malibu Wine and Beer Garden in West Hills. I visited this past weekend and had a delicious Oktoberfest beer and enjoyed their outdoor patio.
