The Housing Market Is Off to the Races

February 14, 2023

The Housing Market Is Off to the Races

The Housing Market Is Off to the Races

January was a hot month where we saw buyers jumping back into their home searches as mortgage rates took a brief yet significant nose dive compared to where rates were Q4 of 2022. For this reason, we experienced more properties going into multiple bidding scenarios, giving sellers a boost of confidence to leave no money on the table if they didn't have to.

As expected, the facts haven't changed much entering February. Properties that have been sitting on the market for 30 plus days have had a surge of interest and we are continuing to see sellers willing to hold out and have their properties on the market for more than a month to get their target exit prices.

Fears of the Feds raising the federal funds rate to fight inflation triggered some volatility in the home mortgage sector last week but promising labor market and easing inflation stats ultimately left the 30 year fixed rate relatively stable. As a result, we have been off to the races in Q1 and don't anticipate the market to slow down in the imminent future.

As always, whether you are in the market for a home or investment property purchase or interested in selling, our team is at your disposal.

What We're Reading

Unemployment numbers reached the lowest point in 54 years (dating back to 1969). Today the unemployment rate is 3.4%, after 223,000 jobs were added in December. What does that mean for housing? Well, there are some mixed messages making the rounds, such as this article in HousingWire: January’s strong jobs report could spell trouble for the housing market.

First, low unemployment means that fewer people are afraid to lose their jobs, so there is more confidence that people can pay their monthly living expenses (as well as travel and entertainment, etc). With low unemployment, there can be more consumer demand and spending, which can lead to inflation. As we have seen in recent months, inflation reduces the purchasing power among consumers. Additionally, the Federal Reserve will also look to raise interest rates to temper inflation. The Fed had already done this multiple times in 2022, and it seemed we may have been coming out of that cycle, but it is now expected that we may have additional rate hikes further into 2023. Federal rate hikes do affect mortgage interest rates (especially short-term rates), causing them to go up and making borrowing more expensive for homebuyers.

To complicate matters and despite record low unemployment, a number of major corporations have announced layoffs recently, including Google, Amazon, Microsoft and Salesforce. These tech companies often pay higher salaries and their job losses could have greater impacts to housing in the more expensive markets. Yet, many of these employees are getting re-employed rather quickly since there are more job openings than there are unemployed adults. It remains to be seen how the rest of 2023 will pan out for the overall economy, including jobs and the housing market.

Read Our February Newsletter Here

Recent Blog Posts

Stay up to date on the latest real estate trends.

Real Estate Market Update - 08/08/2023

August 9, 2023

Mortgage rates have seen a slight increase as of July 27. The 30-year fixed-rate mortgage now stands at 6.81%, up from last week's 6.78%. Comparatively, this time last… Read more

The Market Momentum This Summer

July 10, 2023

We are delighted to bring you some exciting highlights on the current state of the Greater Los Angeles and Orange County housing markets. As we delve into the luxury a… Read more

A Strong Start in Summer Sales

June 9, 2023

The residential housing market in Los Angeles and Orange County has exhibited remarkable strength, marked by high demand and limited supply. This trend shows no signs … Read more

Gearing Up for the Start of Summer

May 18, 2023

The recent rate hikes by the Federal Reserve have had a noticeable impact on mortgage rates. As interest rates rise, mortgage rates tend to follow suit, making it more… Read more

Springing Ahead in the 2023 Real Estate Market

April 21, 2023

As we enter the Spring season of 2023, we wanted to provide you with an update on the current state of the real estate market. In recent months, we have seen a steady … Read more

Spring Forecast for L.A. Home Sales

April 4, 2023

Spring is here and is typically a busy time for our team to prepare our sellers to list their homes on the market. Simultaneously, we have been working diligently to f… Read more

Banking Disruptions - A Potential Silver Lining for Homebuyers

March 17, 2023

So much has happened these last two weeks in the banking sector. The collapse of two prominent banks has caused a state of panic, forcing the Federal government to mov… Read more

Getting Past the Rain

March 3, 2023

Torrential rains and mortgage rates hikes in Los Angeles and Orange County amidst the past several weeks didn’t stop many of our buyers and sellers from making big mov… Read more

The Housing Market Is Off to the Races

February 14, 2023

January was a hot month where we saw buyers jumping back into their home searches as mortgage rates took a brief yet significant nose dive compared to where rates were… Read more

Let's Talk

You’ve got questions and we can’t wait to answer them.