Interest rates and inflation are issues right now, not just here but globally. Older populations in some other countries are problematic, without replacement population the consumer consumption is less.
In the U.S., the Fed is trying to slow down inflation with rate hikes on many instruments, such as credit cards, but the Fed doesn't control the mortgage interest rates, per se. Mortgage interest rates were over 6% in June, but are now down to just over 5%, with it being an extremely volatile market. 6.5% is a slight buyer's market, 4.5% is a slight seller's market.
Do two negative quarters of the GDP indicate a recession? The National Bureau of Economic Research calls the recession, and doesn't use the model of two negative quarters, but uses several other combined market indicators which it says are not yet flashing red. The jobs statistics came out very strong, and with current consumer consumption, which accounts for 70% of the U.S. economy, keep from calling a complete recession. And recession doesn't equal a housing crisis, with interest rates going lower there is an increasing demand for housing.
Inventory in Southern California has climbed from 10,000 listings in January to over 30,000 listings in August. The peak is projected to be in September, which means we are not yet back to pre-COVID market norms. In Los Angeles County, 31% of inventory has reduced its price, due to the current market shift and slow down. Last year time on market was 33 days, today it's 77 days in Los Angeles County, which is still considered a seller's market, 90-120 days on market is considered a balanced market, and above that is more of a buyer's market.
Sellers: Rather than reduce your price, offer the buyers a rate buy down.
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Thanks to Steven Thomas for his excellent Housing Market Report.
Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
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