Westlake Village • Thousand Oaks • Los Angeles • Malibu

The U.S. economy is entering the final weeks of summer with an unusual mix of moderating inflation, a cooling job market, stubbornly high long-term interest rates, volatile financial markets and escalating geopolitical risk.

For Southern California real estate, this creates a market that is neither strongly favoring buyers nor sellers across the board. Instead, the market is becoming increasingly property-specific and price-sensitive.

Well-priced, updated homes in desirable neighborhoods can still attract strong interest, while overpriced homes are taking longer to sell and often requiring price reductions. Buyers have more negotiating leverage than they did during the pandemic-era market, but mortgage rates continue to limit purchasing power.

📉 MORTGAGE RATES: SLIGHT IMPROVEMENT, BUT BONDS REMAIN THE PROBLEM

According to Freddie Mac, the average 30-year fixed mortgage rate fell slightly to 6.65% on August 20, compared with 6.67% the previous week.

The average 15-year fixed mortgage fell to 5.95%, from 5.96% one week earlier.

That is encouraging, but mortgage rates remain stubbornly elevated because long-term Treasury yields have been rising.

The 10-year Treasury yield ended the week around 4.74%, while the 30-year Treasury yield was approximately 5.28%. Long-term yields have been pressured by concerns over government borrowing, inflation, global bond markets and the size of the federal debt.

This relationship is extremely important for housing.

Mortgage rates do not move directly with the Federal Reserve's overnight rate. They are influenced heavily by the 10-year Treasury yield and expectations for future inflation.

Where Are Mortgage Rates Heading?

The outlook has become more complicated.

A Reuters survey of economists found that most expect the Federal Reserve to keep its benchmark rate at 3.50%-3.75% through the remainder of 2026, rather than immediately raising or cutting rates.

That suggests mortgage rates may remain approximately in the mid-6% range in the near term.

My expectation is that rates could fluctuate roughly between 6.25% and 7% through the next several months depending on inflation, oil prices and Treasury yields.

If inflation continues cooling and bond yields retreat, mortgage rates could gradually move closer to the low-6% range.

However, if oil prices continue climbing or long-term Treasury yields remain near current levels, mortgage rates may remain elevated despite a Federal Reserve pause.

For buyers, waiting for a dramatic rate decline is therefore not necessarily a guaranteed strategy.

📈 STOCK MARKET: VOLATILITY RETURNS

Wall Street recovered Friday but finished the week lower.

On Friday, August 21:

Dow Jones Industrial Average: 53,277.01
S&P 500: 7,674.37
Nasdaq Composite: 26,180.45

The Dow gained more than 500 points Friday, but for the full week:

• Dow: -0.85%
• S&P 500: -1.43%
• Nasdaq: -2.05%

The S&P 500 and Nasdaq ended three-week winning streaks, while the Dow recorded its second consecutive weekly decline.

Technology stocks were particularly volatile as rising bond yields put pressure on high-growth companies.

Despite the pullback, corporate earnings remain relatively strong, which continues to provide support for equities.

Why Does This Matter for Luxury Real Estate?

For markets such as Westlake Village, Malibu, Calabasas and Los Angeles, stock-market wealth can significantly affect real estate demand.

Many luxury purchasers rely on investment portfolios, stock compensation or business liquidity.

When financial markets rise, buyers generally feel wealthier and more confident.

When equities fall sharply, discretionary luxury purchases can temporarily slow.

💵 BONDS: ONE OF THE MOST IMPORTANT STORIES FOR HOUSING

The bond market may currently be more important to real estate than the stock market.

Long-term government yields surged during the week amid concerns surrounding:

• U.S. government borrowing
• federal debt
• inflation
• rising global bond yields
• energy prices
• geopolitical instability

The 30-year Treasury yield approached levels not seen since 2007.

Treasury officials responded by expanding government bond repurchases in an effort to improve liquidity in long-duration securities.

For real estate, higher Treasury yields generally translate into higher mortgage rates.

Until the bond market stabilizes, meaningful declines in mortgage rates may be difficult.

👷 JOB MARKET & EMPLOYMENT: HIRING HAS SLOWED

The employment market is showing meaningful signs of cooling.

The economy unexpectedly lost approximately 23,000 jobs in July, although the private sector added roughly 30,000 positions.

The unemployment rate remained approximately 4.1%.

There is an important distinction here.

Companies are not conducting widespread layoffs, but they are becoming more reluctant to hire.

Initial unemployment claims for the week ending August 15 actually fell by 6,000 to approximately 206,000, indicating that layoffs remain relatively contained.

In other words:

Hiring is cooling faster than firing is increasing.

That matters to housing because consumer confidence is strongly connected to employment security.

If households remain employed, demand for homes can continue.

If job losses accelerate significantly, housing demand could weaken.

📊 CPI & INFLATION: IMPROVING, BUT NOT DEFEATED

Inflation provided some encouraging news.

The Consumer Price Index increased only 0.1% in July.

Over the previous 12 months:

Headline CPI: 3.4%
Core CPI: 2.5%

Core CPI excludes food and energy and is watched closely by economists when evaluating underlying inflation.

Shelter prices increased 0.1% for the month and accounted for roughly two-thirds of July's overall CPI increase.

Inflation therefore appears to be gradually improving.

However, there is one major risk:

Energy.

Although energy prices declined during July itself, they remained approximately 14.7% higher than one year earlier.

Los Angeles-area inflation tells a similar story.

The Los Angeles-Long Beach-Anaheim CPI increased 0.3% in July and 3.4% over the previous year, while core inflation rose 2.5%.

🌎 WORLD EVENTS ARE ONCE AGAIN MOVING U.S. MORTGAGE RATES

Geopolitical events are increasingly influencing the American housing market indirectly through oil, inflation and bond yields.

Continuing tensions involving Iran and the Middle East have pushed oil prices higher and created concerns regarding energy supplies and transportation through the Strait of Hormuz.

Brent crude approached $95 per barrel late in the week as investors worried about prolonged disruption.

Higher oil prices affect far more than gasoline.

They increase:

• transportation costs
• construction costs
• manufacturing costs
• shipping costs
• airline expenses
• consumer prices

If rising energy prices reignite inflation, the Federal Reserve has less flexibility to reduce interest rates.

That ultimately affects mortgage rates.

Global government bond markets are also experiencing unusually high yields, putting additional upward pressure on American borrowing costs.

🏡 WESTLAKE VILLAGE HOUSING MARKET

Westlake Village remains a highly desirable luxury and move-up market, but individual property performance varies considerably.

Latest completed Redfin market data showed a median sale price around:

$1.79 million

Homes were selling in approximately 36 days, with 37 sales recorded during June in the city-level dataset.

Because Westlake Village is a relatively small market, its monthly median can change dramatically depending on whether several luxury properties close during a particular month.

The percentage change should therefore be interpreted cautiously.

August transactions already show another important pattern: homes are selling both above and below asking price, depending primarily on condition, location and pricing strategy.

What This Means for Westlake Village Sellers

Sellers should not assume that limited inventory guarantees a premium price.

Buyers are carefully comparing:

• condition
• renovations
• lot size
• schools
• neighborhood
• views
• HOA costs
• insurance
• price per square foot

Homes that are beautifully presented and correctly priced can still perform extremely well.

Overpricing, however, is increasingly being punished with longer market times.

What This Means for Buyers

Buyers have greater negotiating power on homes that have remained on the market for 30, 60 or 90+ days.

Requests for repairs, credits, closing-cost assistance and interest-rate buydowns are becoming more realistic negotiating tools.

🏡 THOUSAND OAKS HOUSING MARKET

Thousand Oaks continues to demonstrate relatively healthy transaction activity.

The latest completed data showed a median sale price of approximately:

$1.11 million

That was approximately 2.1% lower year-over-year.

Approximately 390 homes sold, an increase of nearly 22% from the comparable period, while homes took approximately 40 days to sell.

This is an important combination.

Prices are relatively stable while transaction volume has increased.

That generally suggests the market is becoming more functional and balanced, rather than experiencing a major downturn.

For buyers, there are more opportunities.

For sellers, realistic pricing remains essential.

🏙️ LOS ANGELES HOUSING MARKET

Los Angeles remains extremely neighborhood-dependent.

The latest completed data showed a median sale price of approximately:

$1.10 million

Prices were essentially flat year-over-year.

Approximately 5,098 homes sold, compared with 4,947 the previous year, while the typical home sold in approximately 48 days.

That indicates an important transition.

Los Angeles is no longer experiencing the frantic seller's market seen earlier in the decade.

Instead, more inventory and affordability pressures are giving buyers additional time and negotiating leverage.

Luxury neighborhoods, entry-level neighborhoods and condominium markets can behave very differently, however, so citywide statistics should never replace neighborhood-level comparable sales.

🌊 MALIBU HOUSING MARKET: REBUILDING IS RESHAPING THE MARKET

Malibu is one of the most complicated real estate markets in Southern California because the housing market is simultaneously dealing with:

• luxury-home demand
• limited coastal inventory
• wildfire rebuilding
• construction costs
• insurance availability
• coastal regulations
• permitting
• geological considerations
• rebuilding timelines

Despite those challenges, transactions continue.

Latest completed Redfin data showed:

Median Malibu Sale Price: Approximately $4.29 million

That was approximately 12.9% higher year-over-year.

Approximately 47 homes sold, up from 32 the previous year, while the median market time was approximately 77 days.

However, Malibu buyers clearly have negotiating power.

The average property was selling at approximately 95.2% of asking price, or roughly 5% below list price.

That is particularly significant in the luxury market.

🔥 MALIBU FIRE REBUILDING PROGRESS

Malibu continues recovering from both the 2018 Woolsey Fire and the more recent Palisades Fire.

The Palisades-area devastation was enormous.

City officials reported that recent wildfires destroyed 532 single-family homes, 17 multi-family buildings and nine commercial properties in Malibu, while damaging additional structures.

As of June 26, Malibu reported:

269 property owners had begun the rebuilding process

900 building permits had been issued for debris removal, repairs, damaged structures and rebuilding

342 planning approvals had been granted

226 rebuild projects had completed planning approval

57 building plans were under review

77 rebuilding permits had been issued allowing construction to begin.

This represents meaningful progress, but Malibu rebuilding remains considerably more complicated than building in many inland communities.

Malibu's coastal location, steep terrain, geology, environmental regulations, septic systems and wildfire requirements create additional permitting and construction challenges.

🏗️ MALIBU REBUILD RULES & PERMIT STREAMLINING

There have been significant attempts to simplify rebuilding.

Following the Palisades Fire, Malibu adopted emergency ordinances designed to streamline reconstruction and allow temporary housing while permanent homes are rebuilt.

The California Coastal Commission subsequently certified amendments allowing qualifying like-for-like rebuilds to proceed without obtaining a traditional Coastal Development Permit.

Malibu generally provides several rebuild options.

LIKE-FOR-LIKE REBUILD

Owners rebuilding legally permitted structures in substantially the same footprint, height and square footage can use a streamlined Planning Verification process.

Qualifying owners may also increase height, square footage and volume by as much as approximately 10% under specified conditions.

The City's published target for this streamlined planning process is approximately 20-30 days.

MORE THAN 10% LARGER OR RELOCATED HOMES

If an owner wants to rebuild more than 10% larger or relocate the structure substantially on the property, a Coastal Development Permit can still be required.

That process is considerably more extensive and expensive.

Los Angeles County has also introduced pre-approved standard plans for certain disaster-rebuild properties intended to reduce architectural and permitting delays, although each property still requires site-specific review.

⏰ IMPORTANT WOOLSEY FIRE DEADLINES

Separate from the Palisades Fire rebuilding program, owners still rebuilding from the 2018 Woolsey Fire face important 2026 deadlines.

Certain previously approved Planning Verification rebuild rights expire November 8, 2026, although qualifying owners may request extensions based on hardship.

Eligible Woolsey Fire projects participating in Malibu's fee-waiver program generally must pull required building permits by December 30, 2026 to retain eligible City fee waivers.

These deadlines could motivate some owners either to accelerate construction or potentially sell their properties rather than continue through the rebuilding process.

🏠 HOW MALIBU REBUILDING IS AFFECTING REAL ESTATE

The wildfire recovery is effectively creating several different Malibu real estate markets.

Completed Homes

Move-in-ready homes have scarcity value because many buyers do not want to spend several years managing architecture, permitting and construction.

Rebuild Properties

Properties with approved plans or permits can command a premium over raw fire-damaged lots because much of the entitlement risk has already been removed.

Unpermitted Lots

These can offer opportunity, but buyers must carefully evaluate:

• previous building footprint
• rebuilding rights
• Coastal Commission requirements
• geological conditions
• septic requirements
• erosion
• insurance
• utility restoration
• construction costs
• permit status

Two apparently similar Malibu lots can therefore have dramatically different values.

Newly Rebuilt Homes

As rebuilding accelerates, Malibu will gradually receive a new generation of homes built to modern fire, seismic, energy and building standards.

Over time, that could create an unusual premium between newly rebuilt homes and older properties requiring extensive modernization.

🏡 WHAT THIS MARKET MEANS FOR HOME BUYERS

Buyers currently have something they lacked for several years:

Negotiating power.

Higher mortgage rates have removed some competition from the market.

Buyers should consider negotiating for:

• price reductions
• seller credits
• closing costs
• mortgage-rate buydowns
• repairs
• longer inspection periods where justified

At the same time, attempting to perfectly time mortgage rates can backfire.

If rates eventually drop sharply, demand could quickly return and home prices could strengthen.

A buyer who finds the right property at the right price today may potentially refinance later if rates decline.

The key is purchasing a home that remains financially comfortable at today's rate, rather than depending upon a future refinance.

🏠 WHAT THIS MARKET MEANS FOR HOME SELLERS

Today's buyer is highly educated.

Most buyers receive immediate notifications when:

• a listing enters the market
• the price changes
• a property falls out of escrow
• comparable homes sell
• days on market increase

That makes unrealistic pricing increasingly difficult to sustain.

The first several weeks on the market remain extremely important.

Homes should enter the market:

correctly priced, professionally photographed, properly prepared and aggressively marketed.

Sellers should also remember that today's buyers are calculating the monthly payment—not simply the purchase price.

A strategically structured seller credit or mortgage-rate buydown can sometimes be more valuable to a buyer than an equivalent price reduction.

🔮 HOUSING OUTLOOK FOR THE REMAINDER OF 2026

The Southern California housing market appears to be moving toward normalization rather than collapse.

Inventory has improved.

Transaction volume is recovering in several markets.

Buyers have more negotiating power.

But desirable communities continue to face structural housing shortages.

The biggest variable remains mortgage rates.

If the 30-year mortgage eventually moves toward approximately 6%, many buyers currently sitting on the sidelines could return.

That could strengthen transaction volume considerably.

If rates remain closer to 6.5%-7%, buyers will continue demanding greater value and sellers will need to price accordingly.

THE BOTTOM LINE

The housing market entering the final months of 2026 is defined by opportunity mixed with uncertainty.

Inflation is improving, but energy prices and geopolitical events remain significant risks.

Employment is slowing, but widespread layoffs have not emerged.

Stocks remain historically strong despite this week's pullback.

Bond yields remain the biggest obstacle to lower mortgage rates.

And Southern California continues to demonstrate remarkable resilience.

For Westlake Village and Thousand Oaks, buyers are becoming more selective while desirable homes remain valuable.

In Los Angeles, increased inventory is creating a more balanced negotiating environment.

And in Malibu, wildfire reconstruction is creating one of the most unusual real estate opportunities in California: a coastal market where scarcity, rebuilding rights, insurance, permitting and construction progress can be just as important to value as square footage and location.

For buyers and sellers alike, this is no longer a market where simply following headlines is enough.

Pricing, property condition, financing strategy, and neighborhood-level market knowledge matter more than ever.

READY TO MAKE YOUR NEXT REAL ESTATE MOVE?

Whether you're considering buying, selling, investing, or want to understand what your home is worth in today's changing market, having the right strategy matters more than ever.

I specialize in Westlake Village, Thousand Oaks, the Conejo Valley, Malibu, and the greater Los Angeles luxury real estate market, providing my clients with local market knowledge, strategic pricing, skilled negotiation, and personalized service from beginning to closing.

If you're considering selling, I'm happy to prepare a complimentary, no-obligation market analysis showing your home's current value, recent comparable sales, and how I would position your property to achieve the strongest possible result.

If you're buying, let's discuss where opportunities are emerging, how to negotiate effectively in today's market and whether seller credits or mortgage-rate buydowns could help you secure the right property.

The market is changing—and with change comes opportunity. Let's create a strategy designed around your real estate goals.

Tina Lucarelli
Global Luxury Real Estate Advisor
The ONE Luxury Properties (310) 738-8089

Thinking of buying or selling? Contact me today for a confidential real estate consultation.