#1 - Economic Indicators - What's Impacting Real Estate
- Mortgage Rates (Freddie Mac):
- The average 30-year fixed is 7.04% vs 6.93% last week
- Jobs Report Highlights:
- Nonfarm payrolls: Increased by 256,000 in December, surpassing November's 212,000 and beating the forecast of 155,000
- Unemployment rate: Dropped to 4.1%, slightly below expectations
- Inflation:
- The consumer price index (CPI) rose by 0.4% in December (seasonally adjusted), bringing the annual inflation rate to 2.9%, consistent with forecasts
- Implications for Interest Rates:
- Job growth far exceeded expectations, reducing the likelihood of the Federal Reserve cutting interest rates this year
- With inflation stable and unchanged for months, there’s little pressure to cut interest rates to stimulate the economy.
#2 - Impacts of the fire on LA Real Estate
- The recent fires have caused a surge in rental demand, with displaced families urgently seeking housing
- Rental properties, particularly in areas like Santa Monica, are becoming increasingly scarce
- Homes that were previously sitting on the market are now being quickly purchased as demand grows
- Property values in surrounding areas are expected to rise, given the heightened demand in an already tight inventory market
- Beverly Hills may become even more valuable due to the appeal of its independent and highly regarded police and fire departments
- High-end condos are likely to see increased demand, as older residents displaced by the fires opt for low-maintenance living solutions
- The rebuilding process: is expected to take time, clearing debris could take up to 12 months alone
- Efforts to expedite permitting are underway by the City, but challenges such as staffing shortages and budget constraints for plan checkers may be an issue
- The situation is evolving daily!
#3 - Keep in mind
- Currently, there is a moratorium on issuing new insurance policies
- If you need immediate coverage, inquire about the California FAIR Plan for basic fire insurance coverage, which is often available during moratoriums
- Additionally, under California's price-gouging laws, rental prices should not increase by more than 10% following a natural disaster. These laws are in place to protect residents from excessive rent hikes during emergencies.
#4 - Key Dates in 2025
- The second inauguration of Donald Trump on January 20 2025
- The Fed’s next policy meeting is scheduled for January 28-29 25.
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