January '24 Market Update

Market Update

Quick Take:

The Fed telegraphed that rate hikes are ending, and financial markets expect rate cuts in 2024, which will meaningfully reduce the cost of financing and increase home sales.
Home prices are declining slightly, which is normal this time of year, but mortgage rates are keeping the monthly cost of financing a home at or near record highs.

BIG STORY DATA:

LOCAL LOWDOWN:

Year over year, the median single-family home prices rose across most Bay Area counties in November, staying in line with the six-month horizontal price trend. We expect that trend to continue until interest rates drop and more sellers come to the market.
Active listings, sales, and new listings fell month over month for single-family homes and condos. Inventory will likely decline more over the next few months before rising in the spring.
Months of Supply Inventory indicates the single-family home market still strongly favors sellers, but the condo market has shifted toward a balanced market. It’s common for MSI to trend higher in the fall and winter, when fewer buyers are in the market and sales slow.