Tolani Real Estate

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Economic update for the week ending December 23, 2023 

Stock market and financial news this week - The Personal Consumption Expenditures Price Index (PCE) report for November was released on Friday. It showed that consumer prices are continuing to moderate. The PCE dropped 0.1% from October and rose 2.6% from one year ago. Core PCE, which strips out food and energy, rose 3.2% from one year ago.  On a six-month basis core PCE was up just 1.9%. That’s below the Fed’s target inflation rate. This is more good news that points to inflation taming. The Dow Jones Industrial Average closed the week at 37,385.37, up 0.2% from 37,309.22 last week. It is up 12.7% year-to-date. The S&P 500 closed the week at 4,754.63, up 0.7% from 4,719.07 last week.  It is up 23.8% year-to-date. The Nasdaq closed the week at 14,992.67, up 1.2% from 14,813.92 last week. It is up 43.2% year-to-date.  

U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 3.90% almost unchanged from 3.91% last week. The 30-year treasury bond yield ended the week at 4.05%, up from 4.00% last week. We watch bond yields because mortgage rates follow bond yields. 

Mortgage rates drop at lowest level since July –Every Thursday Freddie Mac publishes home mortgage interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of December 21, 2023, were as follows: The 30-year fixed mortgage rate was 6.67%, down from 6.95% last week. The 15-year fixed was 5.95%, down from 6.38% last week.

California Association of Realtors November existing-home sales report - The California Association of Realtors reported that existing-home sales totaled 223,940 units on a seasonally adjusted annualized basis in November, down 7.4% from October. November marked the third straight month of the annualized sales rate dropping under 250,000, a level that was thought could never happen, and the 29th straight month of year-over-year declines in sales. Year-to-date, the number of homes sold was down 25.9% in November. 

Prior to 2022 home sales have rarely  dropped below 400,000 in decades. They will end the year somewhere around 250,000. While historically interest rates are not that high, compared to the lowest rates in 50-years during COVID the shock of going from the lowest rates in decades to the highest rates in 23-years has caused many potential home sellers to put off their move. In a normal year about 50% of sales are what we call move-up buyers. Those are people selling a home to purchase another. When your mortgage is at a 3% rate, it’s difficult to sell it and purchase another with a mortgage at a 7% rate. For example, if you own a $2 million dollar home with a $1 million mortgage at 3%, your payment with taxes and insurance is about $4,500. If you put your $1 million in equity down on your new $4 million dollar home and obtained a $3 million loan at 6.5% (down from almost 8% two months ago) your payment with tax and insurance would be around $24,000 a month. That’s a big jump and has caused many people to stay in their current home that would normally move to a new home. When people put off their move it reduces the number of homes for sale. This is exactly what is happening now. 

The statewide median price paid for a home in November was $822,200, up 6.2% from a revised $774,150 a year ago. 

There was a 3-month supply of homes on the market, up from 2.7-month supply of homes for sale in October, and down from a 3.2-month supply one year ago.

Development,Investment,Fixer/Flipper opportunity on Large Lot

​12121 Emelita Street, Valley Village

​$1,555,000

8,171 sq/ft

Description: coming soon

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Vacant Lot in residential area

​​0 Pine Place, Santa Clarita 

$300,000

23,371 sq/ft of land

Description: coming soon

Leasing opportunity... Building near Downtown LA Garment District

1501 Los Angeles Street, Downtown LA

$25,000/mo lease

15,725 sq/ft 

Description: coming soon​

Land... Two contiguous lots (LAC2 Zoned) South Western Ave and 58th St 

5718-5722 South Western Ave, Los Angeles 90062

$1,800,000

10,016 sq/ft land

Description: ​coming soon

**Sold** Medical Property For Sale

4852 Melrose Ave, Los Angeles, 90004

​$3,150,000 (Land is $2,700,000 and Dental practice is $450,000)

​7,500 sq/ft

Rare Melrose Avenue Commercial Oportunity for sale with an active Dental business included. Located on a corner lot on Hobart Avenue and Melrose Avenue. The property is 5 blocks from the 101 Freeway.

Click for more details and photos

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