The San Fernando Valley housing market is still hot, but there will be changes coming. The number of new sales are still high, dealing with a slight seasonal easing, but also limited by low inventory.
The available inventory is edging up but still substantially lower than historical averages.
Even though the Federal Reserve conveyed they’re going to keep their Fed Funds Rate basically at 0% for at least the next couple of years while we pull out of the economic weakness created by the Pandemic, the secondary money market has more of an effect on the long side of the rate curve, including mortgage rates.
The news that a COVID vaccine from Pfizer is 90% effective, and that there may be a light at the end of the Pandemic Tunnel hit the financial markets positively. The perception that the economy may have a chance to get back to some type of normality pushed up mortgage rates. As you can see in the chart of the 10-year note, there’s been volatility in the bond market, but the rates are up from the lows. We’ll still be seeing volatility because COVID infection rates are escalating, and we’re still months away from any vaccine distribution. Locking loans by using technical analysis has been valuable.
The new Biden administration will have an effect on the real estate market, in a few ways. The CFPB (Consumer Financial Protection Bureau)and the Treasury Dept will have new leadership and implement several changes. There can be an expected tightening on the regulations applicable to financial services (including mortgage origination), and the industry/market reaction will be higher rates to the borrower and tighter underwriting guidelines.
Another Biden campaign promise was that they want to supply a $15,000 credit to first-time home buyers. That’s probably political rhetoric and not a smart move, at least not good timing, when we’re already dealing with low inventory and bidding wars for purchases. Any artificial stimulation of the purchase market would ultimately be counter-productive. The same approach using $7500 credits was used twice during the last housing recession 10 years ago by both Bush and Obama. All it did was pull forward purchases, then when the credit expired, the market had issues.
Let’s take a look at the latest San Fernando Valley final housing numbers for September. The statistics below are only for single-family dwellings, omitting condos… You’ll soon be hearing about record-high valuations.
ACTIVE INVENTORY (Oct vs Sept)
New listings 630 (was 597)
Total Active Listings 711 (was 666)
Average Days on the Market 75 (was 61)
PENDING AND CLOSED SALES (Oct vs Sept)
New Escrows Opened 527 (was 581)
New Escrows Days on the Market 26 (was 31)
Escrows Closed 549 (was 495)
Average Sale Price $1,098,500 (was $1,091,500)
Median Sales Price $841,000 (was $852,000)
Average Days on the Market 30 (was 41)
Note: The average is the total sales dollars divided by the number of sales… The Median reflects half of the sales are priced above and half below.
Each region, neighborhood, and property has its own elements and dynamics. The numbers above are of the entire SFV, but exclusive of properties in the MLS but located outside of the SFV .
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #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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