The BHAUS EIGHT January 2024 Newsletter

Hello community,

Welcome to our first 2024 edition of our Bhaus Eight Newsletter! We are excited to embark on this new year, and all the exciting events that affect real estate: a reduction on inflation, a soft landing vs recession, a resilient economy, and decreasing mortgage rates.

We are excited to note that many economists are now pointing to a very soft landing in the economy, and not a full recession as some had predicted last year. Our economy continues showing resiliency as the US GDP grew by 3.3% in Q4 2023, surpassing an expected 2% growth. Along with the growth in GDP, the core PCE also declined to 2.9%, closer to the Fed target rate, suggesting a more stable economy going into 2024.

What’s even more exciting is that the combination of events above points to a likely cut in short-term interest rates by the Federal Reserve, which has had a pause on rake hikes for some time now, helping mortgage rates slowly decline to a 7-month low at the end of 2023.

With some companies confirming RTO (return to office) policies, some markets will continue to see deep competition as employees settle close to work, and inventory continues to remain low compared to previous time periods. Competition is even more fierce when you consider that cash sale of homes reached the highest level since 2014, accounting for 38% of all SFR and condo sales in 2023, according to Zeroflux.

We do continue experiencing a tight supply and higher costs of borrowing, which both directly affect supply and demand. At the same time, we expect to see a continued upward momentum on home prices, and with interests declining, an increase in market activity.

The Spring selling season is upon us, and we are looking forward to a busy and happy selling/moving for our clients. In this month’s newsletter…

• BHAUS EIGHT Properties showcases our new 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!

This newsletter photography inspiration: Bavaria, Germany, thinking of all the Christmas markets that are now open!

SouthBay Real Estate.

The Southbay Real Estate continues to have slight increases (similar to last month) across all residential property types, with an average price of $1.2MM (+3.6%), and a median price of $914K +(3.3%) vs LY.

The prices are holding (and slightly increasing) due to the continuing lack of inventory, with last month having a -16.5% drop in new listings vs the previous year, while closed sales were up +9.2%.

DOM (Days on Market) significantly dropped by -41% to only 16 days, vs 27 days a year ago.

Lastly, across the Southbay, listings sold at an average of roughly 98% of the original listing price, thus seeing some room for negotiations between sellers and buyers, but not huge reductions as some buyers may have expected.

See below on Southbay housing stats by city.

Home Stats by City.

Economy & Mortgage News.

As mentioned on our intro, there are many signs pointing to positive outcomes in our real estate market. Our economy continues to show resiliency, with a 3.3% growth in GDP. There are also more signs tpointing to a soft landing vs a recession, which gives consumers a big sigh of relief!

With inflation inching closer to the Fed’s target rate, the Fed has been pausing any further interest rate hikes, and many believe it’s on track to an interest rate cut. We will see if a cut does indeed materialize during the next Fed Reserve meeting at the end of January.

With that, mortgage rates have been declining slightly from the high 7s(%) that we experienced during the last half of 2023. Currently, a conforming 30-year fixed rate loan has an interest rate of roughly 6.375%, while a jumbo 30-year fixed is at roughly 6.5%.

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.