January 2019 - Real Estate Update
Rates are up slightly for the week. We've had a strong rally since December, and it looks like Bonds are battling a tough ceiling of resistance they are trying to break through. There is more potential for a sell-off than a rally so take advantage of these low rates why we can. The Federal Reserve will have its first meeting starting Tuesday with a press conference on Wednesday. They are not expected to increase rates, but bond traders will be paying close attention to what they say.
In Housing News, Existing Home Sales for December were reported weaker than expected with a decrease of 6.4% which was below the expectations of -1.3%. There are a couple of reasons why we saw a drop in Existing Home Sales such as higher rates in October and November when these sales went into contract and the government shutdown causing a temporary hold on flood insurance affecting certain parts of the country. Nationally, the median sales price was reported at $253,000, up 2.9% year-over-year. Within the report, first-time homebuyers decreased from 33% to 32%, cash transactions increased from 21% to 22%, and investors purchased 13% of Existing Homes Sales in December. The Federal Housing Finance Agency (Fannie Mae and Freddie Mac) released their House Price Index, which measures appreciation on single family homes with conforming loan amounts, showing an increase of .4% in November. The year-over-year appreciation increased from 5.7% to 5.8%. Locally, Steven Thomas reported on January 14 that inventory is the highest level in Orange County since 2012. We started 2019 with 5,565 homes compared to 2018 which had 3,397. Demand was slower for the last couple of months which increased the market time for all these new listings. However, I know there is a lot of pent-up demand out there so 2019 should be a good year!