July 2024 Market Update: Key Insights for Our Local Real Estate Market

Hello everyone, this is Jack Ma from Century 21 Masters. We just received the data for June, and there’s some very interesting information to share with you regarding the Southern California real estate market.

Market Data Overview

From January to June, we’ve seen prices appreciate by almost 15%. However, most of this growth happened between January and April. In the typically hot months of May and June, prices have remained flat, indicating that we might be starting to see a plateau.

Market Trends

This shouldn’t come as a surprise if you’ve been following my updates. We’ve seen inventory increase for three straight months and pending sales decrease significantly in the last two months. All of this points to the market starting to slow down.

Explanation

Why is this happening, you might ask? Isn’t inventory still super low? The answer is simple: buyer demand is directly tied to affordability. With interest rates remaining around 7% and prices continuing to rise, affordability has dropped. It’s just getting too expensive.

Market Outlook

Now, you might wonder if the housing market is going to crash. Let me assure you, it will not. While the market will likely continue to cool down until we see interest rates drop more noticeably—and this could happen soon—unemployment is ticking upward, retail sales are sluggish, and inflation is flattening. We’re expecting at least one interest rate cut this year.

Financial Impact

Did you know that for every 1% drop in interest rates, a buyer’s monthly mortgage payment drops by 10%, or they can borrow 10% more? This will bring more buyers into the market and create more competitive bidding situations.

Future Predictions

The National Association of Realtors predicts that home prices will continue to rise over the next five years, but at a more normal rate of 2-5% annually.

Advice for Buyers

So, what does this mean for buyers? If you know prices are going to go up, it would be a smart move to get into the market today despite the high interest rates, and refinance later on.

Advice for Sellers

And for sellers? If you want to sell your home this year, now may be the time as the market shows signs of cooling. Price is a lagging indicator, and we may not see prices recover until next year.

Conclusion

Thank you for reading our June 2024 Southern California real estate market update. If you have any questions or need personalized advice, please don’t hesitate to reach out. Don’t forget to like, share, and subscribe for more market updates and real estate tips. See you next time!

 

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