Compass National Real Estate Insigths

Compass National Real Estate Insigths

November 2023:

The average weekly interest rate has now declined for 4 weeks since its late October high. Financial news is now full of speculation and predictions of the Fed lowering rates sooner in 2024 (and perhaps more often) than what was expected relatively recently.
 
 
As we know, homeowners haven't been moving as often. The below chart quantifies the "expectation to move in the next year" over the past 10 years. Since the data was collected in February of each year, the 2020 figure is just before the pandemic struck, and the 2022 figure is just before interest rates started soaring in earnest. 
 
 
 
Two angles on U.S. new construction from an article in The Washington Post: CA remains at the low end of the scale (while states like Texas, Florida, Arizona and Idaho are at the high end). It remains to be seen how the state mandate on new construction will play out in the actual number of new housing units built in coming years.
 
 
 
More U.S. homeowners own their homes free and clear than at any time in recent history. When these owners sell they have a much greater ability to pay all-cash for a new home, especially if downsizing or relocating to a more affordable market. Perhaps as a consequence, the percentage of all-cash sales has recently been running at a 9-year high.
 
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I don't have reliable data on all-cash sales specific to the Bay Area. This is for the U.S.:
 
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Very different and diverging trends in mortgage-debt delinquency and consumer-debt delinquency: Thanks to the long-term, low interest, home loans most homeowners enjoy, the delinquency rate on U.S. mortgages remains close to a historic low. According to a report by Apollo Global, the "effective outstanding mortgage rate is 3.7%" - climbing slightly higher since 2022, but still very low historically (and compared to current rates).
 
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Positive Media News

 
"Some of the most expensive major cities in the U.S. - like San Francisco and Washington DC - also offer the best living standards for mid- and lower-income households, according to a new study of metro areas by the Ludwig Institute for Shared Prosperity ...Higher prices in those places are more than offset by the higher wages on offer...San Jose [metro area] comes out on top." 
 
The 3 highest ranking metro areas are: 
1) the San Jose metro area (Santa Clara & San Benito Counties), 
2) the Austin metro area,
3) the San Francisco metro area (SF, Marin, San Mateo, Alameda & Contra Costa Counties). 
Bloomberg News, 11/22/23, "Some of America's Costliest Cities Offer Best Middle-Class Life" 
 

Latest National Real Estate Market Report:

-> Specific San Francisco Home Prices and Market conditions report 

-> Specific Marin County Home Prices and Market report

 

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