The latest October housing statistics for the San Fernando Valley are out, and they’re telling an interesting story. Sales are down substantially, mortgage rates have been on a roller coaster, and the condominium market is showing some particularly troubling signs. Having been involved in real estate sales and mortgage lending for over 4 decades, I’ve watched numerous market cycles. One thing I’ve learned is that mortgage rates, affordability, and consumer confidence have a significant impact on sales activity. And we’re seeing that play out again.
Mortgage Rates: Some Welcome Relief
Over the past several months, 30 year fixed mortgage rates climbed from approximately 6% earlier this year to nearly 7.6% in early October. They’ve since retreated by roughly half a percentage point, settling around 7.1%. That’s encouraging, but keep in mind that real estate sales statistics are a lagging indicator. Buyers who closed escrow in October generally negotiated their purchases and arranged financing weeks earlier, when rates were climbing. Consequently, the recent improvement in mortgage rates isn’t reflected in October’s sales numbers. If rates stabilize or decline further, we should see some improvement in buyer activity over the coming months. However, affordability remains a major obstacle, particularly for first time buyers.
Financial markets have also been extremely volatile. Oil prices have recently backed off, potentially easing some inflationary pressure. But renewed conflict involving Iran could quickly reverse that trend. Also recently there’s increasing AI Build Out Bonds selling off, with some of those funds have gone to buyer US Securities and Mortgage Backed Securities. Inflation, Treasury yields, Federal Reserve policy, and mortgage backed securities markets will continue influencing where mortgage rates go from here.
Single Family Homes: Sales Down, Prices Holding
According to the Southland Regional Association of REALTORS’ October 2026 report:
- Median sale price: $1,133,000, up 3% year-over-year.
- Closed sales: 390, down 25%.
- Pending sales: 278, down a substantial 45%.
- Active listings: 1,873, down 10%.
- Months of inventory: 4.8 months.
The interesting part is that prices are holding relatively well despite significantly fewer transactions. Many homeowners have substantial equity and low fixed rate mortgages, reducing the pressure to sell. However, the 45% decline in pending sales is concerning because pending transactions are generally an indicator of future closings. A seasonal slowdown can be expected.
Condominiums: A Much More Troubling Picture
I’ve written extensively over the past couple of years about the challenges facing condominium homeowners associations, including escalating insurance premiums, inadequate reserves, deferred maintenance, special assessments, and increasingly restrictive mortgage financing requirements.
Those issues are now becoming much more apparent in the sales statistics.
- Median sale price: $595,000, down 5% year-over-year.
- Closed sales: 134, down 28%.
- Pending sales: Just 86, down a staggering 52%.
- Active listings: 888, down 10%.
- Months of inventory: 6.6 months.
Think about that. Only 86 condominiums went into pending status during October, compared with 888 active listings at month’s end. While those numbers aren’t a direct buyer-to-seller ratio, they illustrate just how challenging the condominium market has become. And unlike single family homes, condominium median prices are already declining.
The problem goes beyond mortgage rates. Buyers and lenders are increasingly scrutinizing HOA financial statements, reserve funding, insurance coverage, litigation, and the physical condition of condominium projects. A buyer may qualify financially for a mortgage, only to discover that the condominium project itself doesn’t meet the lender’s requirements. As financially weaker HOAs face increasing pressure to raise dues, impose special assessments, or address deferred maintenance, I expect these challenges could become even more pronounced. And as more of those financial problems become public knowledge, some condominium owners may find selling or refinancing increasingly difficult.
Where Do We Go From Here?
The recent decline in mortgage rates is certainly welcome news. Lower borrowing costs should help bring some buyers back into the market, although I don’t expect a dramatic turnaround while affordability remains so constrained. Single family homes appear to be weathering the slowdown better, supported by homeowner equity and relatively limited inventory.
Condominiums are another story. Their affordability advantage is being increasingly offset by higher HOA costs, insurance expenses, potential assessments, and financing restrictions.
My concern is that we’re seeing the beginning of a longer term divergence between single family homes and condominiums, particularly in developments with financially challenged HOAs. Also post election, as I’ve conveyed many times in the past, ownership of Residential Rental Properties in the Los Angeles region should be increasingly seen as a negative investment. Consider a 1031 Exchange and purchase in an area with fewer regulations and better returns. It’s not going to get any better.
The next few months should be interesting. Mortgage rates may provide some relief, but they won’t solve every problem facing today’s housing market.
Real estate is local, and understanding the numbers behind the headlines matters more than ever.
If you’d like to discuss the changing market conditions mean for your home, your buying plans, or your financing options, feel free to reach out. In today’s market, having current information and a sound strategy can make all the difference.
Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
President/Broker
Multi Real Estate Services, Inc.
DRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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