Home Sales Were the Lowest in Almost 30 Years in 2023

The National Assn. of Realtors said Friday that existing U.S. home sales totaled 4.09 million last year, an 18.7% decline from 2022. That is the weakest year for home sales since 1995 and the biggest annual decline since 2007, the start of the housing slump of the late 2000s.

In California, home sales fell 24.8% in 2023 from the previous year, the biggest drop since the 2007 housing slump, according to the California Assn. of Realtors. The state’s median home price — the point at which half the homes sold for more and half sold for less — reached $819,740 in December, up 6.4% from a year earlier.

Source: Los Angeles Times

These are the 10 best U.S. metro areas to buy a house in 2024...

A December report from real estate broker Realtor.com ranked the best U.S. cities to buy a house in 2024 based on expected price growth and sales.

The annual report analyzed the country’s 100 largest metropolitan areas and the final result is a list with half of the top metros in California.

10 best U.S. metro areas to buy a house in 2024:

1. Toledo, OH

2. Oxnard/Thousand Oaks/ Ventura, CA

3. Rochester, NY

4. San Diego/Chula Vista/Carlsbad, CA

5. Riverside/San Bernardino/Ontario, CA

6. Bakersfield, CA

7. Springfield, MA

8. Worcester, MA-CT

9. Grand Rapid/Kentwood, MI

10. Los Angeles/Long Beach/Anaheim, CA

The No. 2 best place in the U.S. to buy a house is Oxnard/Thousand Oaks/Ventura, California.

The California metropolitan area is expected to see existing home sales climb by 18% year-over-year. The median sale price of existing homes is expected to jump by 3.3%, according to the report.

Do you think interest rates will drop below 6% in 2024?

2024 predictions:

6.1% Mortgage bankers association

6.3% National Association of Realtors

6.5% Fannie Mae

6.8% Realtor.com

The new "mansion tax" that starts Saturday is now projected to bring in 25% less than original estimates advertised to voters in November.

This past November, Los Angeles voters backed Measure ULA, a transfer tax on big-ticket property sales that the city says will generate a new revenue stream for affordable housing projects and homelessness prevention. Known as the “mansion tax,” Measure ULA will impose a 4 percent tax on property sales above $5 million and a 5.5 percent tax on properties above the $10 million mark. The tax must be paid by the seller.

The City of Los Angeles now expects to make a lot less from its new transfer taxes than originally advertised.

Measure ULA is projected to generate up to $672 million in revenues from July 1 of this year through June 30 of next year, according to an analysis from the City Administrative Office, which conducts financial and budget analyses. The office released its report 2 weeks ago.

The new numbers are about 25 percent less than original estimates provided to voters in November, assuming about $5.1 billion less in property sales.

US home sales surged in February as mortgage rates dipped

Sales of previously occupied U.S. homes surged in February to the fastest pace in six months as homebuyers seized on a modest drop in mortgage rates.

Existing home sales jumped 14.5% last month from January to a seasonally adjusted annual rate of 4.58 million, the National Association of Realtors said Tuesday.

The surge in sales — the biggest on records going back to 1999 — ended a 12-month slide that knocked the nation’s housing market into its deepest slump in nearly a decade and left sales in January at the slowest pace in more than a dozen years.

Home sellers are now seeing 5, 12, even 20 offers

Last year around this time it was not unusual to see 30 offers for one property. That is not an exaggeration. Then interest rates went up and buyers got scared. In the 4th quarter of 2022, a home on the market was lucky to get 1 offer.

Today, buyers have accepted the higher rates and are actively looking to buy.

I can now report that homes that are priced at market value and are in a decent location are seeing multiple offers again. I have first-hand knowledge of homes in and around the San Fernando Valley that are getting 5, 12, or even 20 offers.

The homes that are overpriced or in a bad location are sitting on the market. Some will point to those homes and say the market is tanking. If you believe the market is tanking then you are not in the real estate trenches.

30-year fixed-rate mortgage jumps over 7%

In my 14-year career, I have never seen interest rates climb so quickly in such a short amount of time. They were in the high 2% range earlier this year.

Source: CNBC

Bolder Fed inflation policy may catapult mortgage rates

At their last meeting in June, the Fed had a 75-basis point increase. That played a big part in the mortgage interest rates shooting up like crazy.

The Fed will now meet again at the end of July. Many economists predict the Fed will tighten its monetary policy further to control inflation. That could lead to another 75- or 100-basis point increase in the Fed’s short-term benchmark rate. While the Fed’s benchmark rate does not directly impact mortgage rates, it does influence them.

NAR Chief Economist Lawrence Yun said following the Fed’s last rate hike in June—its largest since 1994—that the buyer pool could shrink even further as mortgage rates increase.

Condos have the best deals right now

Condo sales are rebounding because buyers are finding great deals.

The pandemic turned a lot of people off condos.

Buyers realized just how important having outdoor space and a garage really is.

After a 50% sales plunge this spring, condo sales have recovered.

In October, condo sales increased 22.7% compared to a year earlier on a seasonally adjusted basis.

In my opinion, the best deals going down right now are in condo purchases.

Just sold in Sherman Oaks

Late 2019, the owner of 14332 Dickens St #20 was frustrated that he was unable to sell his unit.

He had it on the market at $679,000 for over two months, but his agent could not attract a buyer.

With no hope in sight, the owner decided to pull the unit off the market.

That's when I contacted him!

I showed him what I do differently to sell condos and how my marketing would quickly attract a buyer.

He agreed to let me sell his unit.

Within 11 days I received multiple offers and closed the deal at $702,000 - that's $23,000 over the original list price he had with his original agent.

A big thank you to the owner for trusting me with the sale of their property!

Home refinances are up 88%

With interest rates being so low right now, refinances overall increased 6% last week and are now up 88% compared to a year ago.

Source: Mortgage Bankers Association

Home inventory down 39%

According to a realtor.com report, September's home inventory was 39% lower compared with the same month last year.

Meanwhile, buyers are keen to take advantage of the record-low interest rates, which have been hovering at or below 3%.

Have you heard? Historically low interest rates are happening now!

Do you think interest rates will continue to go down?

Episode 38 of The #AskDanielLosAngeles Show

On this episode, I answer the following four real estate questions:

1) What's going to happen in the real estate market for the rest of 2020?

2) What do mortgage interest rates look like for home buyers right now?

3) Has it been difficult to show homes during the pandemic?

4) What's the hardest real estate deal you ever had?

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