BHAUS EIGHT September 2023 Newsletter

Hello community,

Introducing L’Eau D’Autumn!

Well no, we are not doing a brand extension just yet :), but we do welcome the Fall season and all its colors, scents, home decor, and new listings!

This season is turning to be an interesting one. Markets are shifting, and we mostly see this as a combination of the low inventory (depending on location), and the climbing interest rates that have weakened demand somewhat. With the average lender offering a mortgage rate of around 7.5% to top tier clients, even higher to those with lesser credit worthiness, buyers are asking for more concessions and it only behooves sellers to stay on top of their local market trends, comparables, and buyer sentiment so as to not chase the market.

One of the great things for the real estate market is that mortgage delinquencies are at their lowest since 2006, according to Zero Flux, with delinquencies down 25% vs same time last year. The quality of mortgages outstanding, and the high equity sellers enjoy, is allowing them to make some concessions but still come out with a win-win situation where they sell their home, realize their equity, and are able to move on to the next property with ease.

This ever changing market shift makes it super important to provide our community with the most up-to-date stats and tools necessary to navigate this real estate selling and buying successfully.

In this month’s newsletter…

• BHAUS EIGHT Properties showcases our listings across our markets

• The Southbay Real Estate section has the latest local stats and trends, giving you all the info needed to get your home on the market

• Home Stats by City

• The Economy & Mortgage News has the latest updates on inflation, consumer spending, and up-to-date mortgage rates.

  Have you followed us yet? make sure you are following us on Instagram and/or Facebook to get updates that are not sent to our mailing list! These updates include Open Houses, quick stats, inspiration for your home and your travels, as well as our exciting house viewings!

SouthBay Real Estate.

The Southbay Real Estate market prices increased versus a year ago despite the rising mortgage rates that have put some pressure on the market. August saw an average home price of $1.5MM (+15%) and a median price of $922K (+0.4%). The inventory continues to be down from a year ago. We had 350 listings coming on the market in August, which represents a drop of -24% vs a year ago. Even with the lower inventory, the closed sales were only down -5% vs a year ago, with 343 homes closing in the month of August across all Southbay cities.

Similar to last month, we had roughly a 2-month supply of homes, while the average DOM was at 23, a +15% increase vs a year ago.

On the cities that we report on below, all except Redondo Beach had median price increases vs a year ago, with the highest jump being in Hermosa Beach (+18%), followed by Hawthorne (+15%), Gardena (+9%), and Manhattan Beach (+6%).

Home Stats by City.

Economy & Mortgage News.

Mortgage rates have remained elevated, with an average 30-year fixed rate staying above 6.5% since May, while recently hitting an all-time high above 7% in August. Just earlier this week, a conforming 30-year Fixed Rate mortgage was pricing out at roughly 7.51%.

In economy news, labor markets continue to outperform expectations, keeping the inflation rate above target. As such, interest rates are expected to remain elevated for longer than initially anticipated by economists, according to C.A.R. The August jobs report was strong, showing 23,100 added non-farm jobs to the labor market, while the rate of unemployment claims filed were the lowest since October 2022.

For now, the Federal Reserve is keeping the Fed Funds rate at 5.5%, and signaled they may keep the higher rate longer than expected in order to bring inflation down. Analysts expect the rate to come down to 5% in 2024, slightly higher than the previously consensus of 4.5%.

In all, economy remains resilient, jobs market is staying strong, all good news for consumers from a household perspective. At the same time, these are the pressures on inflation that in turn, are affecting the capital markets and ultimately, the higher mortgage rates. We are expecting a seasonal slowdown with the holidays in the horizon, with only serious sellers and buyers active on the market bringing many opportunities for our community.

Contact your BHAUS EIGHT team with any comments or questions!

To subscribe to our weekly emails of investor opportunities and our digital newsletter, please email Sonia directly at Sonia@bhauseight.com

From BHAUS to yours.