One of These (Markets) is Not Like the Other

The amount of available homes for sale continues to pick up in certain areas across the country. In Dallas, for example, inventory is up 45% year-over-year, and sales transactions are down 11.6% YOY. Not too surprisingly, prices are down there by 1.2% YOY.

States like Florida, Texas, Colorado, and Idaho are seeing rapid increases in housing inventory and slight price drops. However, in California, home prices have not cooled off yet. Despite a notable population decline across nearly every county in the state, prices remain high. This trend defies expectations, as one would typically assume that a decrease in population would lead to lower housing prices.

Inventory on the Monterey Peninsula has increased by 32% year-over-year. Back in March 2024, inventory levels were lower compared to July 2023, but a significant number of homes have entered the market in recent months. Despite this growth, current inventory is still about 40% below pre-COVID levels.

In 2024, transactions on the Monterey Peninsula have increased slightly by 2% compared to 2023. As we move further into the year, it will be important to monitor both inventory levels and transaction numbers. With the peak home-listing season nearly over, continued inventory growth combined with fewer transactions could lead to downward pressure on prices, similar to what is happening in the Dallas market.

Mortgage Rates Relax

Mortgage rates fell a bit last week, and are currently sitting at the lowest level since March. Is it impossible to envision a scenario of 5.X% rates on the 30-year mortgage before the end of the year?

Stock Market Froth?

The stock market hit a new high (again) but global hedge funds have been reducing their exposure to this sector, specifically large, tech-related stocks.

Dollar Strong, Foreign Purchases Weak

There was a 36% drop in foreigners purchasing property in the country from April 2023 to March 2024, likely a result of higher mortgage rates and a strong US dollar.

Underwater Homes

The number of underwater homes in the U.S. has reached a record low. An underwater home is one where the mortgage balance exceeds the property's value. In 2010, 23% of homes were underwater. Today, only 1.8% of homes across the country are in this situation - the lowest percentage ever recorded.

San Francisco Fast-Tracks Housing Approvals

Recently, San Francisco adopted a new bill to streamline the development approval process and encourage more homes to be built. This new bill, SB 423, will accelerate the time it takes to approve most new housing in the city, decreasing approval times from two years to just six months. Slated to take effect in many other cities across the state next year, SB 423 is intended to streamline development for many areas, including coastal communities.