Economic Update November 2018

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Real Estate

Stock markets lost 2% in another volatile week

Stocks had another losing week. Great Britain's government is in turmoil as the Prime Minister and the Parliament can not agree on a plan to exit the Euro Zone which was demanded by the Brexit vote. This has their economy slowing. The U.S. Dollar strengthened to the highest level in two years. This makes American goods more expensive, and imported goods less expensive. Apple stock suffered its seventh straight weekly loss. It dropped 5% this week and is off 17% from its highs due to disappointing sales. Amazon was down 7%, Netflix dropped 5.7%, and Facebook dropped 4% for the week. The Dow Jones Industrial Average closed the week at 24,413.22, down from 25,989.30 last week. It is up 2.8% year to date. The S&P 500 closed the week at 2,736.27, down from 2,781.01 last week. It's up 2.5% year to date. The NASDAQ closed the week at 7,147.87, down from 7,406.99 last week. It's up 5% year to date.

Treasury Bond Yields lower this week - The 10-year treasury bond closed the week yielding 3.08%, down from 3.19% last week. The 30-year treasury bond yield ended the week at 3.33%, down from 3.40% last week. We watch treasury bond yields because mortgage rates follow bond yields.

Mortgage rates unchanged this week - The November 15, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.94%, unchanged from 4.94% last week. The 15-year fixed was 4.36%, up slightly from 4.33% last week. The 5-year ARM was 4.14%, unchanged from 4.14% last week. I'd expect to see rates a little lower in next week's survey, as rates dropped late in the week.

California existing home sales report October 2018 - The California Association of Realtors reported that sales of existing homes in California totaled 397,060 on a seasonally adjusted annualized rate. The number of sales was down 7.9% from October 2017. The median price paid for a home in California was $572,000, up 4.7% from last October. Listing inventory rose for the 7th straight month. We now have 28% more active listings than we had one year ago. The unsold inventory index showed a 3.6 month supply of homes on the market, up from 3 months in October 2017. A normal market has a 6-7 month supply. We are well above last year's historic low inventory levels, but we are still below normal levels. On a regional level the median price in Los Angeles County rose 5.9%, Orange County rose 3.1%, and Ventura County rose 2.4% from October 2017. Inventory levels are also higher. Los Angeles had a 3.7 month supply, up from 2.9 months a year ago. Orange County had a 4.1 month supply, up from 3.1 months one year ago. Ventura County had a 5.1 month supply, up from 4.6 months last October. The number of sales was also down locally with LA County down 5.9%, and Orange County down 11.9%.


The number of homes sold in Ventura County was up 1.1% from last October. 

It's a great time to buy in Ventura County!!

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