August 24, 2024

Good morning,

California labor markets signaled full steam ahead in the latest jobs report with hiring posting its best showing in 6 months. With inflation slowing further in July, mortgage rates continue to rally, and homebuyer demand is finally approaching positive territory for the first time since rates began to rise in 2022.

Mortgage delinquency rates remain very low in California and the percentage of homeowners with significant equity to stave off foreclosure in a worst-case scenario remains remarkably high. Fundamentals are also bolstered by the fact homeowners currently have very attractive mortgage payments, with roughly two-thirds of the state in a 4% rate or lower (90% of which are fixed-rate loans).

If you have any questions regarding our local market, please reach out.

Have a great weekend!

Information + Updates

Did You Know?

New construction home supply is almost triple that of existing home supply as those who own a home stay married to their lower rates. The overall US home inventory has risen notably in the past few months while still less than half that of 2008 when the US also had a population of around 304 million....today that has jumped to almost 342 million, up 12,5%. (CNBC)

Did You Know?

Gen Xers are worse off financially than their baby boomer predecessors. The median household net worth of Gen Xers between 45 and 54 years old was about $250,000 in 2022, about 7% lower than that of baby boomers at the same age in 2007. The oldest Gen Xers are about to turn 60 next year. Gen X is the first generation to almost fully experience both parents working and being responsible for their retirement. About 72% of Gen Xers own a home.

Did You Know?

Nationally, All-cash offers made up 27% of July sales, up from 26% the year before and far higher than the historical norm. (CNBC)

Did You Know?

Goldman Sachs has cut its probability forecast for a U.S. recession to 20% from 25%, shortly after raising it from 15%. (CNBC)

Did You Know?

Many condo owners around the US are blaming high inflation for much higher monthly costs when in reality, many condos are simply adjusting to the new normal that was a result of the Champlain Towers collapse highlighting the need for condo owners and their boards to build healthy reserve funds, perform regular inspections and initiate timely repairs.

"If they brag about a habit, it's likely just a rare occurrence. People who do things regularly don't boast about those things."

––'Gstaad Guy’

“The tech scene in America is like the jazz scene in the 1950s. I’m constantly telling people 86% of the top 50 tech companies in the world just by market cap are American.”

––Alex Karp, Palantir

*** BUYER NEED ***

Dear neighbors, I have a GREAT all cash buyer looking for home with a view, could be a fixer or could be a finished home up to $20M. Closing time frame is flexible. Please call me at 949-233-7949 if you are interested in selling.

Real Estate News

The Fed Is Cutting Rates.

What Does That Mean Exactly?

Jerome Powell, Chairman of the Federal Reserve (Fed) announced a roll out of upcoming cuts to the interest rate. This is the interest rate that lending institutions lend to other institutions and affects everything from car loans to real estate. Since many Americans became accustomed to 2.5% or 3% rates during Covid, the lending environment slowed WAY down when the Fed raised rates in 2023. So a lowering of rates may encourage movement in the real estate market going into the holiday season and surely into 2025.