It’s a slow news week, at least as it relates to real estate. Yet, the pressure is building all over the place and no one seems to be sure which direction it’s going to go.

This week: keepin’ it simple…just the weekly snapshot.

Weekly Snapshot

On the local front, we are officially in the slower selling season as you can see by the large drop in the number of new listings hitting the market.

 Aug 6 - 12Prev 4 Week Avg.% ChangeJuly 30 - Aug 5
New Listings688807-14.77%734
New Pending Sales8808631.97%820
New Sales618696-11.17%708
Active Inventory3,1923,451-7.50%3,230
30 Year Fixed Mortgage2.87%2.81%2.23%2.77%

July 2021 Round-up

Week over week inventory took a plunge. I verified this using live MLS stats, not just the SDAR release (lesson learned). The data below and the averages is correct.

 June 11-17Prev 4 Week Avg.% ChangeJune 4-10
New Listings734830-3.52%801
New Pending Sales8208341.8%849
New Sales7086544.24%682
Active Inventory3,2303,5140.23%3,522
30 Year Fixed Mortgage2.77%2.84%-1.41%2.8%
Savvy (aka desperate) buyers are taking full advantage of the cool-down on the bidding war front to snatch a house now before the inventory shrinks to next to nothing again. As you can see they are quickly eating up the inventory gains we’ve had over the last couple of months.

On the national front, the waters are murkier than ever.

On the “oh ****, we’re about to fall off a cliff” side of things:

  • COVID Delta is wreaking havoc all over the country and dampening the spirit of the economic recovery.
  • Consumer sentiment (as a result of the new above and inflation noted below) took a nose dive to its lowest point since the pandemic began (yes, even lower than April of last year when the whole world shut down).

On the “oh ****, things are heating up” side of things:

  • The Producer Pricing Index (which measures demand and costs at the manufacturer level, see RR from last week) grew above expectations at an annual rate of 7.8%, the largest advance on record and a sign of more inflation to come.
  • Stock markets are setting new record highs every week, multiple times a week.
  • The economy added almost 943,000 jobs in July, beating June’s massive increase and above estimates of 843,000

As a result of all this, mortgage rates had a dizzying week. Monday-Thursday they shot up like a rocket following all the inflation news only to fall quickly again on Friday after that absolutely awful consumer sentiment report dropped.

We ended the week a full 1/10 of a percent higher than last week, but that could’ve been a lot worse.

I don’t envy the position of the Fed. They’re stuck between that proverbial “rock and a hard place”.

With COVID rearing its ugly head all over the world again, it’s hard to justify rolling back any of their generous monetary policy. But on the flip side, this crazy inflation could cause more harm to the lower class than anything else (see the note below about rental rates going up like mad).

In The News

    • Despite admitting the CDC eviction moratorium is illegal, a federal judge refuses to overturn it.
    • San Diego’s VERY strict eviction ban, which basically gave a hall pass to all renters regardless of COVID implications, has ended.
    • San Diego County rent has seen some of its biggest increases in decades this summer.

The Week Ahead

As it relates to real estate, nada. We’ll be watching mortgage rates closely to see how they follow up on last week’s wild ride.

Until next time!