THE DAILY DOSE
May 1, 2023
Is the correction over?
The Case-Shiller home price index ROSE 0.2% month-over-month in February 2023, the first increase since June 2022. Have prices bottomed already? The national index is down just 2.8% from its peak. That’s not a crash. It’s barely even a correction. 9 of the big 20 cities tracked by Case-Shiller saw increasing prices, and the pace of price declines in cities like SFO and PHX slowed dramatically.
Competition returns
In a recent survey, 82% of respondents said they felt ‘locked-in’ by their low mortgage rates and so were unlikely to sell. That’s a big reason why the inventory of existing homes is so low. But demand remains high, and that’s why we’re seeing more competitive bids and a greater % of sales happening above the listing price. It’s also why new home sales surged 10% MoM in March!
Rate relief ahead?
The economic newsflow was more bad (recession red flags) than good, and that helped push average 30-yr mortgage rates back down to 6.5%. The market still expects another +25 bps increase in short-term interest rates from the Fed next week. As we approach summer, however, the trend in inflation (and therefore mortgage rates) should be notably lower.
LOCAL MARKET TRENDS APRIL 24 - 30 2023
WHITTIER
Median Price – $798,000
Active Listings – 66
New Listings ( last week) – 12
Median Days on Market – 35
LOS ANGELES
Median Price – $1,395,000
Active Listings – 2115
New Listings ( last week) – 170
Median Days on Market – 53
Bottom Line
Overall, an encouraging week for the real estate market, with national home prices rising month-over-month in February, according to both Case-Shiller and the FHFA. New home sales jumped and competition levels are rising. But the low inventory of existing homes led to lower pending sales.
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