School is back, football and soccer games fill the schedules, and it still feels like summer out there. When I was lifeguarding, I used to refer to September as “Resident’s Month” – that rare time when you still have summer weather without the crowds. So I hope you get a few moments to enjoy Resident’s Month, wherever you call home. Now on to the latest South Bay/PV Market Update….
Summer closed with a “par for the course” rating – In line with the past 2 summers but slower than the pandemic years and before. But inventory numbers are up, suggesting that with slower than normal buyer activity, we are in the midst of a slight buyer’s market. But what will happen if rates drop? I defer to my post which discusses what really drives mortgage rates. For those short on time, a fed rate drop is not going to do much to boost sales or inspire more sellers to list their properties. We are locked firmly in the grasp of the impact of 40 years of declining interest rates and what is now familiarly known as the rate lock-in effect. In other words, with over 80% of homeowners holding a mortgage with a rate under 6%, it’s going to take more than a slight drop in rates to motivate buyers and sellers to move based on mortgage rates. What is moving the market is the D’s – Diapers, Diplomas, Divorce, and Death. The one missing from this is Job Transfer. It’s life factors moving the market, not prices and rates.
Based on what we know today, I expect to see a little bump in activity now that summer is winding down. Current inventory is averaging over one month on the market and closed sales are averaging 98% of the list price, with bigger discounts on homes over $3.5M. For buyers actively looking, it’s a great time to see if you can pick up a great property with less competition, and for those looking to sell, realistic pricing is the key to success.
Current Market Rating: Slight Buyer’s Advantage
