July 2023 Real Estate Market Report: Pacifica, California

Recession? Not in Sight!

Surpassing expectations, the US economy demonstrated its resilience by posting an impressive 2.4% annualized growth rate in the second quarter of 2023. This remarkable figure not only exceeded the anticipated 1.8% growth but also marked a notable improvement from the 2.0% growth achieved in the previous quarter. With such positive signs, some may wonder if Jerome Powell and the Federal Reserve have successfully achieved the elusive 'soft landing.' However, it's essential to exercise caution before drawing any hasty conclusions. Despite the encouraging GDP and employment figures, several economic indicators are still sending cautionary signals, hinting at the possibility of a future recession.

Home Prices Continue To Rise

Median Home Price in Pacifica, CA, has reached $1,27M. It’s 2.75% increase since the last month and 4.47% increase over last 3 months. Home prices in Pacifica has been increasing since the beginning of 2023 but they are still 11% below July 2022 values. Median Days on the market in July was 13 days vs 8 days on the market in July 2022.

Federal Reserve Raises Rates Again to Tackle Inflation

The Federal Reserve, concerned about the persistent core inflation (excluding grocery and gas prices), decided to resume its rate hike cycle. After a brief pause last month, the Fed raised rates by an additional 0.25% (25 basis points) this week, bringing the total rate hike to 5.25%. Despite efforts to control inflation, average 30-year mortgage rates remained steady at around 7%. However, the real estate market showed resilience as pending sales for June managed a modest 0.3% month-on-month increase.

The Fed's move to raise rates reflects its commitment to tackling inflationary pressures that have lingered for over a year. While overall inflation has been on a decline, the central bank aims to accelerate the decline in core inflation, which accounts for everyday essentials like groceries and gas prices. This targeted approach seeks to stabilize prices and maintain economic stability.

In the face of higher mortgage rates, the real estate market remains resilient, as evidenced by the modest increase in pending sales for June. This indicates that there is still demand for housing despite the borrowing cost challenges posed by higher interest rates.

As the Fed continues its efforts to control inflation and stabilize the economy, homebuyers and sellers should closely monitor market developments. Real estate professionals, like myself, can provide valuable insights and guidance to navigate these changing economic conditions. Whether you are buying or selling a property, consulting with a local expert can help you make informed decisions and achieve your real estate goals effectively.

Marina Kurdyukova

Realtor® 02081521

EXP Realty

(415) 910-3298