SF: August 2024 Market Stats

Mid-Summer Market Conditions

As of August 8th, mortgage rates had declined to their lowest point in over a year, while financial markets were experiencing very substantial volatility. Most analysts believe the Fed will finally begin to drop their benchmark rate in September (pending a positive inflation report in mid-August). Lower interest rates, of course, have a considerable effect on the cost of homeownership for those financing their purchase, and a sustained decline would almost certainly spark increased market activity - not only of buyers but potentially of sellers who held off listing their homes in the past 2 years due to the "mortgage lock-in" effect. Much depends on the scale of any decline in rates - as well as possible changes in other economic conditions - through the end of the year.

Following the typical seasonal trend, the market cooled in summer from what is usually its most heated selling season in spring. New listing and sales activity slowed, overbidding declined, and homes took longer to go into contract. The 3-month-rolling median house sales price often dips in summer after peaking in spring (due to a number of factors) but it remains higher year-over-year - as is the median condo sales price after a July jump. The market usually sees a dramatic rebound in new listings in September to fuel the autumn selling season, but August may see an "unseasonal" burst of sales activity if the decline in interest rates continues in the coming weeks.

Finding comprehensive and affordable homeowners' insurance remains challenging: According to the CA Association of Realtors, nearly 7 percent of recent real estate transactions statewide fell out of escrow due to insurance issues, but noted that "The state's largest insurance regulatory reform in 30 years is set to go into effect by the end of this year." Hopefully, this will result in substantial improvement to a very difficult situation in many of our markets.