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Week of October 2nd- October 8th

Real Estate News

Mixed Signals

Mortgage demand has reached its lowest point since 1995 due to rising interest rates. The average rate for a 30-year mortgage has surged to 7.88%, the highest since August 2000. This has driven mortgage demand below levels observed during the 2008 crisis. While this decline suggests a cooling housing market, the persistent shortage of supply adds complexity. Despite reduced affordability for buyers, the market remains in favor of sellers due to scarcity.

Just last week, the latest jobs report based on company payrolls revealed the addition of 336,000 new jobs, which is fantastic for job seekers but potentially concerning for those hoping the Fed won't raise rates further. However, when we consider the household survey, which polls individuals rather than employers, it shows only 89,000 jobs were added this month. This discrepancy could be attributed to the fact that more individuals are now holding multiple jobs, possibly suggesting economic challenges for individuals rather than a robust economy. Another indicator supporting this perspective is the total job force participation rate, which remains unchanged. Examining the statistics for full-time employment, which have notably declined in the past three months, indicates that a greater number of individuals working multiple jobs are engaged in part-time work.

Last week, I discussed the remarkable third-quarter price records in Monterey County for 2023. It's crucial to note that these figures encompass the entire sales market, including hundreds of transactions spanning various price ranges and regions. However, it's worth highlighting that specific segments within the residential real estate market are outperforming others. As a fundamental rule, it's essential to recognize that real estate is inherently local, characterized by distinct submarkets.

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Jonathan Balog

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M: 831.747.0310
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.

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