Palos Verdes Peninsula June 2016 single family real estate market report

Summary: The number of homes listed for sale on the Palos Verdes Peninsula surged significantly higher in June with the number of homes sold only marginally higher compared to the prior year, leading to an increase in unsold inventory to a bit over 3 months supply. Prices have also only increased marginally compared to the prior year. Lower priced homes are also moving faster than the upper end of the market. Houses have also been taking approx. 2 months to sell.

The number of properties listed for sale for the overall Palos Verdes Peninsula at the end of June of 242 properties is 22% higher than the same time last year, and the average number of homes sold per month of 74 over the last 3 months is 2% higher than the comparable period last year. There are 73 homes in escrow at the end of June.

The average price per sq. ft. for homes sold over the last 3 months of $604 per sq. ft. is up 2% compared to the comparable period last year.
Based on the average monthly sales of 74 homes over the last 3 months, the current inventory of 242 home for sale equates to about 3 months inventory. The chart below is based upon the most recent months sales.s for

The average price of the homes sold on the Palos Verdes Peninsula during the last 3 months averaged $1.7 million, down about 2% compared to the average price of homes sold in the comparable period last year. The average listing price for homes during the last 3 months of $3.1 million is 15% higher than the comparable period last year. These statistics show that lower priced homes are selling faster than the higher priced homes.

 

Days on Market to sell a property has been averaging about 2 months, and properties are selling at approx. 97% of original list price.

For other market reports for the Palos Verdes Peninsula, go to Market Reports on
my web site.
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Interest rates edge up this week

Interest rates for buying a home on the Palos Verdes Peninsula edged slighly up this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Without new pressure from abroad, mortgage and other interest rates have climbed off their recent bottoms and settled into a mostly directionless pattern, at least for the moment. It’s not clear whether this is a posture that indicates that the initial fallout from the Brexit vote last month has been completely assessed by markets and judged to be of little immediate consequent or whether it’s more a case of waiting for the other shoe to drop.

Arguably, it’s the former: As least so far, evidence of any damage is limited, at best, and the U.S. economy at least seems to still be plodding along, if at perhaps a faster pace in the second quarter than it achieved in the first. How much faster is a matter of speculation at the moment, but we’ll get at least the initial answer to that next week.

To the extend that the U.S. economy isn’t diminished, and if there are few global implications of Britain’s decision to leave the European Union, we would again begin to consider whether or not the Federal Reserve will resume its campaign of gradually lifting short-term interest rates. For the moment, it’s wait and see, with new economic data trickling out as time passes. Even an accumulation of modest data in the context of stable financial markets could be sufficient for the Fed to make a move, but until that accumulation of data happens, mortgage and other interest rates can’t really move much.

At the moment, market seems to have found a bit of stability, and mortgage rates have firmed by just a whisper off Brexit-induced bottoms. That said, there are likely still plenty of unknown repercussions and market events we’ll yet see in time. The improving tenor of at least U.S. economic data has helped to calm restive markets. Fed meeting this coming week not withstanding, markets almost have a feel akin to the summer doldrums. Given all the recent events, that’s actually a welcome change.

A somewhat heavier calendar of economic data is out next week, a period bisected by the Fed meeting. New information on consumer confidence, sales of new homes, durable goods orders and the initial reading of second quarter GDP growth are all on tap. It seems to us that the warmer tone for data will be evident again next week, and the statement closing the Fed meeting will probably be one of cautious optimism.

With warmer data and optimistic messages expected, we think there’s a good chance that we’ll see another uptick for mortgage rates of a couple of basis points (perhaps three), continuing a gradual move away from recent Brexit bottoms.”

The following are interest rate quotes from American California Financial:

30 Yr Fixed FHA
Rate APR
2.875 3.999 Details

Conforming 30 Yr Fixed up to $417000
Rate APR
3.375 3.491 Details

Conforming Jumbo 30 Yr Fixed $417001 – $625500
Rate APR
3.625 3.732 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
3.875 3.968 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.375 3.570 Details

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Interest rates ease a bit

Interest rates for buying a home on the Palos Verdes Peninsula stayed level this week. The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Mortgage rates declined a fair bit this week, as investors refocused on global economic troubles and the words and deeds of central bankers around the globe.

Even as economic data continue to show that modest U.S. economic expansion continues, doubts remain that it is durable enough to continue in the face of considerable worldwide headwinds, or strong enough so as to be an engine to help lift the world from its malaise. Certainly, many central banks are employing novel approaches to try to spark growth in their economies, but so far the only success story to be seen is here.

Much as it might like to, the Fed cannot lift interest rates as desired, at least not without causing the kind of market-disrupting outward ripples we endured in the aftermath of the Fed’s small move to the Federal Funds rate back in December. That move — and plans for as many as four more this year — so unsettled markets that the Fed was forced to back down its expectations for lifting rates in 2016 from four moves to two.

As they usually do after tumultuous periods, markets settled, and now, with Fed policy de-tuned, there aren’t any immediate rate changes for which to plan or hedge. The Fed is watching the data for clues, the market is watching the Fed for clues, with both reacting accordingly when they come. At the moment, the Fed is “talking down” expectations for growth and rates by highlighting the risks and challenges the economy faces. This has helped mortgage rates to fall, but presents a bit of a quandary for the Fed’s messaging to markets.

The overall average rate for 30-year fixed-rate mortgages eased by eleven basis points (.11 percent), slipping back to an average 3.67 percent, its lowest value since May 2013.

If financial markets are confused or caught off guard by the Fed, pity the poor homebuyer or homeowner who has to puzzle though these times. They see “The Fed Is Raising Rates” as a headline, and start to expect higher rates… only to find when they finally look, that mortgage rates are lower. Of course, this does certainly happen, most typically at the end of a Fed tightening cycle, where the markets interpret that the present level of short-term interest rates is so high as to start to choke off growth… and market interest rates begin to fall to reflect that happenstance.

Now, to be sure, we are not at the end of the Fed cycle, and barely at the beginning, but the reaction by markets is much the same, especially in light of perhaps a current GDP rate of near zero (per the Atlanta Fed’s running model). In essence, and nominal levels of interest rates be damned, Fed policy is perceived as “tight” relative to growth, and sufficient enough to inhibit this growth to a degree. If economic growth were 4 percent the December quarter-point rise would have meant little, but with an already subdued rate of growth, any additional monetary drag (no matter how slight) can have an outsized effect.

With the margin for error so slim, it’s crucial that the Fed’s discussion of the economy strike just the right balance. It’s a conundrum, all right, the repercussions of which we, and the Fed and other central banks and economies will have to endure.

Mortgage rates dipped this week but firmed just a touch on Friday. New economic data due next week include retail sales and the Fed’s survey of regional economic conditions, producer and consumer price indexes an a few other items. We’ll probably see rates edge upward by couple to a few basis points”

The following are interest rate quotes from American California Financial:

30 Yr Fixed FHA
Rate APR
3.250 4.379 Details

Conforming 30 Yr Fixed up to $417000
Rate APR
3.500 3.617 Details

Conforming Jumbo 30 Yr Fixed $417001 – $625500
Rate APR
3.750 3.857 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
3.750 3.842 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.250 3.444 Details

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Interest Rates move down slightly again

Interest rates for buying a home on the Palos Verdes Peninsula moved down slightly this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :

“More signals that all is not right in the economic world were revealed this week, and interest rates legged down a bit again. That the U.S. economy lost steam in the fourth quarter of 2015 was a given, and the deceleration from a 2 percent rate of growth in gross domestic product in the third quarter to one of just 0.7 percent in the fourth wasn’t unexpected.

The Federal Reserve made no change to interest rate policy this week, either; none was expected. However, ever without a rate move, the central bank managed to help roil markets anyway, as they removed from their meeting-closing statement any assessment of the current balance of risks for economic growth and inflation. Sharp-eyed analysts picked up on this immediately, and coupled with other language in the release, took it to mean that the Fed has serious concerns about the effects that current global trends will have on U.S. growth and inflation. A concerned Fed is less likely to raise rates, and this helped lend some cheer to battered stock markets and helped interest rates to fall.

Much of the downward pressure for rates came on Friday, when the Bank of Japan joined several other nation’s central banks by making banks actually pay them interest to park excess cash reserves with them. This move is intended to have banks not hold onto this cash, but instead push it out into the markets and making more loans to consumers and businesses in hopes of stimulating growth and inflation. However, at least the initial reaction would seem to be that excess funds from everywhere got plowed into bonds instead, driving yields on Japan’s sovereign bonds to record lows; German Bunds also got a significant wash of cash, and their 10-year yield dropped sharply as well. U.S. and other bonds caught a strong rally, too.

So a wobbly and unstable economic world continues, at least for now leaving the U.S. perhaps the most reliable place to park money. As long as this continues to be the case, we’ll continue to attract funds, excessive or otherwise, which in turn will continue to temper and tether interest rates. In some ways, this might even be considered an echo to the “conundrum” described by former Fed Chairman Greenspan back in the mid-part of the last decade; the Fed was raising short-term rates steadily at the time in the midst of 17 consecutive increases, but despite the Fed’s moves, long-term rates refused to budge. Now, as then, there was likely plenty of money washing around the world after a long bout of stimulus (though considerably smaller than that seen today) looking for a place to go, and any return on capital (even if puny after currency exchanges and taxes) is still better than no return or a loss.

Forecasting rates in this kind of environment is more than humbling, and we’ll need a reversal in trend to rescue our current two-month forecast, to be sure. At the very least, we will begin next week with interest rates stepping down, but there is plenty of fresh important data that may sway the markets, too. For the last couple of years, a weak start to the year has been followed by a strong uptick in growth by the time the second quarter rolls around. Given that the current weakness started earlier (4th quarter) it remains possible that we could see an earlier improvement, too. That said, January’s data is just starting to show, and probably won’t be much better than December’s, if at all.

Rates are likely to end the next week down a bit from here, probably 6-8 basis points or so. Will the groundhog signal six more weeks of economic winter or an early warming trend? We’ll have to wait to see.”

The following are interest rates quotes from American California Financial:

30 Yr Fixed FHA
Rate APR
3.250 4.379 Details

Conforming 30 Yr Fixed up to $417000
Rate APR
3.625 3.743 Details

Conforming Jumbo 30 Yr Fixed $417001 – $625500
Rate APR
3.875 3.983 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
3.750 3.842 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.000 3.444 Details

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Palos Verdes 4th Qtr. 2015 Home Real Estate Market Report

The inventory of unsold single family homes on the Palos Verdes Peninsula as of the end of December of 145 units is up approx. 1% compared to this time a year ago. The number of sales over the last 3 months of 167 units (average of 56 per month) is up 7% compared to a year ago. There are only 34 units in escrow at the end of December, however.

 

 

 

The average price per square foot of homes sold on the Palos Verdes Peninsula over the last 3 months of $604 per sq. ft. is up approx. 3% compared to the similar period last year.

 

The average days on market to sell a home on the Palos Verdes Peninsula has been approx. 2 to 3 months recently. Homes are currently selling at an average of 94% of list price.

With 145 units for sale at the end of December and the average monthly sales over the last 3 months of 56 units sold equates to less than 3 months of inventory. The chart below is based upon the most recent month’s sales.

The average list price for a home on the Palos Verdes Peninsula is approx. $2.8 million. The Average sold price of $1.7 million over the last 3 months, however, is down 6% compared to the prior years comparable 3 months . There continues to be a wide gap in the average list price and the average sold price, indicating that the lower priced homes are selling at a quicker pace.

For other market reports for the Palos Verdes Peninsula, go to Market Reports on my website.

 

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Interest rates decline slightly

Interest rates for buying a home on the Palos Verdes Peninsula moved down slightly this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :

“If their collective actions are any indication, investors are continuing to express considerable nervousness about the U.S. economy’s ability to grow and produce inflation in light of the ongoing slump in oil and commodity prices and the unraveling of China’s stock market.

Certain of the aspects of the global slowdown are exacerbated by the Fed’s recent decision to lift short-term interest rates for the first time in nearly 10 years. Just as very wobbly financial markets gave the Fed pause in moving rates last September, it may well be that this again keeps them from making a change anytime soon, and certainly not at the meeting slated at the end of the month.

As has been the case, the unsettled global climate has proven to be to the benefit of American mortgage shoppers, and this again is the situation in which we find ourselves, with mortgage rates finding a little space to fall. While it’s not yet the traditional homebuying season, refinancing season is always open and it stands to reason that at least a few more of those will happen in the days ahead.

Modest wage growth, weak retail sales, falling prices and a struggling manufacturing sector are joined by wobbly global financial markets and super-low oil prices. With this as a backdrop, and as they are known to do, investors have scurried out of riskier investments and into safer harbors. On an immediate basis, it means that interest rates are falling and pulling mortgage rates down along with them. We wonder if some of the market maelstrom on Friday might have also been U.S. investors trying to limit exposure as markets are closed for the next three days — this was the case at times during the financial market crisis that predated the recession. Regardless, the current turmoil could persist for a while longer yet but of course won’t last forever. Mortgage rates probably have limited downside, what with (at last blush) a Fed committed to lifting interest rates perhaps multiple times in 2016. We’ll see about that as we go along.

Mortgage rates are declining a little as we write this, and so will begin next week on a downward note. With only a slight drift downward over the last couple of weeks, we suddenly find ourselves at levels last seen in November and again squarely in the middle of a year-long range, not that it took much movement to get there. We’ll figure on another 4-6 basis point dip in interest rates by the close of business next Friday.”

The following are interest rates quotes from American California Financial:

30 Yr Fixed FHA
Rate APR
3.250 4.379 Details

Conforming 30 Yr Fixed up to $417000
Rate APR
3.750 3.869 Details

Conforming Jumbo 30 Yr Fixed $417001 – $625500
Rate APR
3.875 3.983 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
3.875 3.968 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.125 3.499 Details

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Palos Verdes Peninsula ( All Cities ) October 2015 single family real estate market report

The number of properties listed for sale for the overall Palos Verdes Peninsula at the end of October of 202 properties is 7% higher than the same time last year, and the average number of homes sold per month of 63 over the last 3 months is 1% higher than the comparable period last year. There are 58 homes in escrow at the end of October.

The average price per sq. ft. for homes sold over the last 3 months of $601 per sq. ft. is down 3% from the same compared to the comparable period last year. 
Based on the average monthly sales of 63 homes over the last 3 months, the current inventory of 202 homes for sale equates to a bit more than 3 months inventory, which historically is extremely low. The chart below is based upon the most recent months sales.

The average price of the homes sold on the Palos Verdes Peninsula during the last 3 months averaged $1.8 million, down about 2% compared to the average price of homes sold in the comparable period last year. The average listing price for homes during the last 3 months of $2.7 million is 7% less than the comparable period last year. These statistics show that lower priced homes are selling faster than the higher priced homes.

 

Days on Market to sell a property has been averaging a bit more than 2 months, and properties are selling at approx. 95% of original list price.

For other market reports for the Palos Verdes Peninsula, go to Market Reports on
my web site.
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