California Housing Market Update - June 2024

Welcome back to my monthly real estate update! I'm Michelle, your trusted real estate expert specializing in helping first-time homebuyers and sellers SAVE MONEY and help make the PROCESS SMOOTH.  In this post, we'll dive into the latest trends and insights for the Southern California housing market - June 2024.

Current Housing Market Trends

Last month, the housing market remained quite stagnant. The primary reason? Mortgage rates have been on a roller coaster, staying on the higher side. This volatility isn't just a numbers game; it's also impacting builder confidence. With all this uncertainty, construction activity has taken a hit. However, it's not all doom and gloom. On the flip side, the existing home sales market is showing signs of life. New listings have increased significantly, marking the fifth consecutive month of double-digit growth. Sellers are getting more comfortable with the new dynamics and are listing their homes for sale.

Federal Reserve Rate Predictions

With inflation hinting towards a downturn, the Federal Reserve is likely to cut rates this year. There are meetings scheduled for July and September, and hopefully, rates will come down. As interest rates start to stabilize, it will give buyers more confidence to enter the market. This creates a window of opportunity for homebuyers. Currently, with interest rates around 6%, there is less competition. However, as soon as rates lower, more buyers will enter the market, driving up home prices.

Market Opportunities

Now might be an excellent time to buy. Even though interest rates are at 7%, you can always refinance later. Right now, you can get a great deal on properties, especially those that have been on the market for more than 60 days. You can negotiate closing costs and other terms to your advantage. Waiting for lower interest rates could mean higher home prices and more competition.

NAR Settlement Overview

The NAR settlement is set to change the real estate landscape significantly, especially regarding how Realtors are compensated. After August 17th, all companies will have to restructure their compensation models, which could add additional costs for homebuyers. It's essential to stay informed about these changes as they unfold.

Home Prices & Inventory Levels

California's median home price has hit an all-time high, now standing at $980,040. Despite fluctuating mortgage rates, the market remains competitive, with home prices continuing to rise. This surge is driven by higher-priced properties and seasonal trends typically seen from May to August.

California Insurance Crisis

The insurance crisis in California has been a significant concern for homebuyers. Increased wildfire severity and rising construction costs have pushed some insurers to limit new policies. Major providers like State Farm and Allstate have paused or restricted new homeowners policies. If you're in the market to buy, it's crucial to research and secure homeowners insurance early to avoid complications during escrow.

Economy Update

The economy is showing signs of cautious spending. Retail sales have increased slightly but not as much as experts predicted. Lower fuel prices and a rise in credit card usage suggest consumers are becoming more careful with their spending. This trend could impact the housing market as potential buyers adjust their financial plans.

Local Market Update: San Dimas

In May 2024, the San Dimas real estate market saw significant activity. The median home price in San Dimas increased by 15.3% from last year, now standing at approximately $1 million. Homes in this area are selling quickly, with a median of 10 days on the market. San Dimas is currently in a seller's market, with 1.7 months of inventory available. This local market update highlights the robust demand and limited supply, making it a competitive environment for buyers.

VA Temporary Policy Change

The VA has temporarily changed its policy on home loan buyer broker fees. Now, veterans can pay for their buyer broker fees as part of their closing costs. This change is significant as it enables veterans to consider homes that may not offer compensation for buyer agents, expanding their options in a competitive market. The VA will monitor the effects of this policy before making any permanent decisions.

Final Thoughts

The California housing market is dynamic and ever-changing. Staying informed is crucial whether you're buying, selling, or just curious about the market trends. Subscribe to my YouTube Channel here to stay on top of all the updates, book a consultation for personalized advice, and follow us on social media for daily insights.

Thank you for reading! If you have any questions or need further information, book a call here. Happy home hunting! 🏡🌟