The second week of September brought renewed volatility to financial markets and another challenge for the housing market. Inflation, rising oil prices, geopolitical tensions and higher Treasury yields are keeping borrowing costs elevated just as the Federal Reserve prepares for its September 15–16 meeting.
For homeowners, buyers and sellers in Westlake Village, Thousand Oaks, Calabasas and Los Angeles, the story remains highly localized: desirable homes are still selling, but buyers are increasingly sensitive to price, condition and monthly payment.
STOCK MARKET & DOW JONES
Wall Street finished Friday on a strong note after four consecutive losing sessions. The Dow Jones Industrial Average rose approximately 1% Friday to 52,573, while the S&P 500 gained about 0.9% and the Nasdaq approximately 1%.
The Friday rally, however, wasn't enough to erase the week's losses. For the week, the Dow declined approximately 1.6%, the S&P 500 fell 0.8%, and the Nasdaq declined 0.7%. Despite the volatility, all three remained positive for the year.
Investors are wrestling with two competing forces: continued strength in parts of the economy and renewed inflation pressure. Technology and AI-related investment continue to provide support to equities, while oil, interest rates and geopolitical uncertainty are creating headwinds.
BONDS, THE FED & INTEREST RATES
The bond market may currently be more important to real estate than the stock market.
The 10-year Treasury yield approached 5% during the week, briefly reaching approximately 4.99%. The 30-year Treasury yield climbed to roughly 5.36%, its highest level in more than two decades.
Higher Treasury yields generally put upward pressure on mortgage rates.
Markets are now heavily focused on the Federal Reserve's September 15–16 meeting. Stronger employment numbers, persistent inflation and rising energy costs have significantly increased expectations that the Fed could raise its benchmark rate by 0.25 percentage point.
For housing, the Fed's language about future inflation and interest rates could be every bit as important as the actual decision.
MORTGAGE RATES
Mortgage rates moved higher again.
According to Freddie Mac, the average 30-year fixed mortgage rate was 6.76% as of September 10, compared with 6.71% the previous week and 6.35% one year ago.
The average 15-year fixed mortgage was 6.09%, up from 6.04% the previous week.
For Southern California buyers purchasing million-dollar and multimillion-dollar properties, even a quarter-point movement in rates can materially change the monthly payment.
That makes strategy increasingly important. Buyers should compare lenders, consider rate buydowns when appropriate and evaluate the complete cost of ownership rather than focusing exclusively on the purchase price.
JOB MARKET
The labor market delivered a surprisingly strong August report.
The U.S. economy added 162,000 jobs in August, while unemployment remained at 4.1%. Average hourly earnings increased 3.1% from a year earlier.
Weekly unemployment claims also remain relatively low. Initial claims for the week ending September 5 declined slightly to 206,000, suggesting widespread layoffs have not materialized.
A strong job market is normally positive for housing because employment supports household formation and mortgage qualification. The complication today is that stronger economic data can keep interest rates higher for longer.
INFLATION
Inflation remains one of the biggest obstacles to lower mortgage rates.
The Consumer Price Index increased 0.4% in August and 3.4% over the previous 12 months. Core inflation, excluding food and energy, increased 0.3% for the month and 2.4% year-over-year.
Energy is becoming particularly important. Rising oil and fuel prices can work their way through transportation, manufacturing, construction and consumer goods, making the Federal Reserve's job more difficult.
For real estate, persistent inflation matters because it can keep Treasury yields—and consequently mortgage rates—elevated.
WORLD EVENTS & THEIR EFFECT ON HOUSING
Geopolitical events are having a surprisingly direct effect on American mortgage rates.
Middle East tensions and disruptions surrounding the Strait of Hormuz pushed oil sharply higher during the week. Brent crude reached a four-month high near $110 before retreating Friday, but still finished substantially higher for the week.
Higher oil prices can increase inflation expectations. Investors then demand higher yields on long-term bonds, which can translate into higher mortgage rates.
Global conflict, energy-market instability, trade uncertainty and concerns over U.S. government debt are therefore affecting Southern California housing indirectly through the bond and mortgage markets.
THE U.S. HOUSING MARKET
Higher borrowing costs are clearly affecting national home sales.
Existing-home sales declined 2% in August to a seasonally adjusted annual rate of 3.98 million homes—the lowest level in 14 months. Inventory increased to approximately 1.62 million homes, representing about a 4.9-month supply.
Despite weaker sales, the national median existing-home price increased 1.6% from a year earlier to approximately $429,100.
This is increasingly becoming a market where buyers have more choices but still face substantial affordability constraints.
WESTLAKE VILLAGE
Westlake Village remains a highly desirable luxury and lifestyle market, but buyers are becoming more selective.
Recent Redfin data characterizes the market as somewhat competitive, with homes taking approximately 51 days to go pending on average. Typical homes have recently sold about 3% below asking price, while particularly desirable properties can still sell near asking price.
That distinction is important. Westlake Village is not one single market. Lakefront homes, North Ranch, First Neighborhood, gated communities, remodeled townhomes and multimillion-dollar estates can behave very differently.
For sellers, condition, presentation and correct initial pricing matter enormously. Buyers paying today's mortgage rates are less forgiving of overpriced properties or homes requiring extensive improvements.
THOUSAND OAKS
Thousand Oaks is showing signs of price normalization.
Over the three months ending August, the median sale price was approximately $1.07 million, down 6.6% from the same period last year. Homes sold in approximately 45 days on average, while transaction volume was slightly higher than a year earlier.
This does not mean every Thousand Oaks home has lost 6.6% of its value—median prices reflect the mix of homes sold—but it does indicate a market where buyers have more negotiating power.
Move-in-ready properties in desirable neighborhoods can still attract strong interest, while homes needing renovation or carrying aggressive pricing may sit longer.
CALABASAS
Calabasas continues to behave differently because of its luxury price point, limited supply, and concentration of high-net-worth buyers.
Recent market data placed the median sale price around $1.8 million, with prices showing year-over-year strength.
Luxury buyers may be less mortgage-dependent than the broader market, but they are not insensitive to financial conditions. Stock-market volatility, borrowing costs and economic uncertainty can influence when affluent buyers decide to act.
Exceptional homes with privacy, views, acreage, security, remodeled interiors and desirable school access continue to command attention. Properties that are merely "priced like luxury" without delivering luxury condition or amenities face greater resistance.
LOS ANGELES
Los Angeles is showing a more balanced market.
Over the three months ending August, the median sale price was approximately $1.055 million, down 1.4% year-over-year. Homes were taking approximately 52 days to sell, while August transaction volume increased from the previous year.
That combination—slightly softer pricing but increased transaction activity—is important.
It suggests buyers haven't disappeared. They have simply become more discriminating.
Los Angeles remains extremely neighborhood-specific. Prime properties in desirable neighborhoods can still generate competition, while overpriced homes can accumulate significant days on market.
WHAT THIS MEANS FOR BUYERS
Buyers may have something they haven't enjoyed consistently in recent years: negotiating leverage.
Higher rates are frustrating, but they can reduce competition. Buyers may have greater opportunities to negotiate price, credits, repairs or financing concessions.
A buyer who waits exclusively for dramatically lower mortgage rates could eventually find themselves competing with many more buyers if rates fall.
WHAT THIS MEANS FOR SELLERS
This is not a market where sellers should simply choose an ambitious price and "see what happens."
The first few weeks on the market remain extremely important.
Homes that are properly prepared, professionally marketed, and accurately priced can still command strong offers. Homes that enter the market significantly overpriced risk becoming stale and ultimately requiring larger price reductions.
In today's environment, pricing is a marketing strategy—not just a number.
THE BOTTOM LINE
The Southern California housing market is being pulled in opposite directions.
A relatively healthy labor market and limited desirable housing supply continue to support home values. At the same time, mortgage rates near 7%, persistent inflation, high Treasury yields, and geopolitical uncertainty are restricting affordability.
For Westlake Village, Thousand Oaks, Calabasas, and Los Angeles, this creates opportunities for both buyers and sellers—but strategy matters more than it did during the frenzy of previous years.
READY TO MAKE A MOVE?
Whether you're considering selling, buying your next home, investing, downsizing, or simply wondering what your property is worth in today's changing market, accurate neighborhood-specific information is critical.
Contact Tina Lucarelli for a confidential real estate consultation and customized market analysis.
I specialize in Westlake Village, Thousand Oaks, Calabasas, the Conejo Valley, and greater Los Angeles, helping buyers and sellers navigate changing markets with strategic pricing, targeted marketing, and skilled negotiation.
The market may be changing—but opportunity doesn't disappear. It simply moves. Let's find yours.
