2024 Quarter 2 real estate market update

2024 Quarter 2 real estate market update

Before we get into rates and supply for our Q2 Market update, I'd like to touch on a personal story about a friend of mine and his baseball journey. 

  • 3 Life Lessons I Learned From Mike
  • Interest Rates - “Soft Landing?”
  • Supply Levels - “Bay Area Median Sales exceed $2 million for first time”

3 Life Lessons I Learned From My Friend Mike

Michael and his twin brother Thomas moved from the UK to their grandparents' home down the street from us (Josh and I) when we were about 7 years old. We walked home from school together nearly every day until high school.

Despite his 6’7” large stature Michael was always soft-spoken. His smile, however, was impossible to miss – always huge and ever-present. A simple man, he never cared for flashy fashion trends, a true “meat and potatoes” guy. Despite being a car enthusiast, he often dreamt of owning quirky European hatchbacks, though I doubted he would fit in them.

Michael's height often led to questions about basketball, but he always redirected the conversation to baseball, saying, “I’m a ball player.” By high school, we were confident he’d be drafted for his pitching talent.

Michael Petersen was first drafted by the Pittsburgh Pirates in the 19th round of the 2012 MLB Draft right out of St. Francis High School but did not sign. He was later drafted by the Texas Rangers in the 31st round of the 2013 MLB Draft, again not signing. His professional career began after two years at Riverside Community College when he was drafted by the Milwaukee Brewers in the 17th round of the 2015 MLB Draft at 21.

After several years in the Brewers' minor league system, Petersen was claimed off waivers by the Colorado Rockies in 2019. His journey faced setbacks, including the cancellation of the 2020 minor league season due to the COVID-19 pandemic and Tommy John surgery in 2021. At 27, his chances of making it to the major leagues seemed slim.

After nearly all of the 2022 season spent in rehabilitation, Mike had the unique opportunity to represent Great Britain at the World Baseball Classic. Here’s the first lesson: remain open to opportunities, even when they look different from what you imagined, and give every opportunity your all. What seemed like a risky exhibition match, post rehab, became a turning point in his career.

After a few unlikely wins, Great Britain found itself facing the United States team, full of Major League stars, Mike was called in to pitch. He proceeded to strike out Nolan Arenado, an 8-time All-Star, with a blazing 100 mph fastball, retiring the side and marking him as a standout pitcher capable of competing with the best.

In 2024, he signed with the Los Angeles Dodgers, leaving the Rockies without a major league debut. On June 16, 2024, at age 30, Mike finally got the call he had been waiting for his entire life. Two days later, he stood on the mound at Coors Field against his old team, the Rockies.

In his post-game interview, Mike mentioned that he had always visualized his major league debut on the mound at Coors Field. Here’s the second lesson: the power of manifestation. The world responds to intentionality, though the journey may look different than imagined. Mike stood on that exact mound, but wearing Dodger blue, reminding us to stay open to the journey while keeping sight of our goals.

In the bottom of the 7th inning, with the Dodgers down 4-8, Mike walked the first batter and allowed a single, then got out of the inning allowing only one run. In the eighth inning, he struck out two batters and retired all three he faced.

The game became legendary in the ninth inning with a pinch-hit grand slam by Jason Heyward and a three-run home run by Teoscar Hernández, leading to one of the most historic comebacks in baseball history…and Mike’s first major league win.

The Final Lesson from Mike: Stay resilient. True personal growth and character development emerge from our most challenging times. These moments of adversity are where we find our strength, refine our purpose, and learn the deepest truths about ourselves.

On Saturday June 28th, Josh and I had the opportunity to watch Mike pitch against the San Francisco Giants at Oracle Park. He was handed the ball during the top of the 7th, one out, with a man on second. After walking the first batter, he struck out the next two batters and retired the side…

Interest Rates

After several months of “hotter than expected” inflation prints to start the year, the second quarter brought some relief as inflation realigned with expectations. The Labor Department reported that the U.S. economy added 272,000 jobs in May, exceeding economists' expectations of 190,000 new jobs. Most of these new jobs fell within the Government and Healthcare sectors, continuing the trend reported in previous months. This news brought mortgage rates back in the low to mid 7% range. However, The Labor Department on Friday revised May’s job gain down to 218,000 and April’s job gain down to 108,000, meaning the economy added 111,000 fewer jobs than first reported. As a result, mortgage rates dropped significantly, settling well below 7% (The Hill).

The Labor Department also noted that U.S. wages were up 4.1% year-over-year. Despite the job growth and wage increase, the unemployment rate ticked higher to 4.0% in May ending the longest sub-4 percent streak since the 1960s. On Friday that figure was reported at 4.1% a sign to many economists that the economy is starting to show signs of weakness. 

Federal Reserve Chair Jerome Powell commented, “The labor market has come into better balance, with continued strong job gains and a low unemployment rate. Inflation has eased substantially from 7% to 2.7%. But it’s still too high” (Forbes Advisor). The Federal Reserve has maintained a somewhat hawkish stance when discussing future rate cuts (Fox Business). During the June Fed Meeting, Powell revised the original projection of three rate cuts in 2024 to a single cut, stating, “We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%” (Mint).

The next Fed Meeting is scheduled for July 31st. Markets project an 85% chance that the Fed will maintain interest rates at their current levels. However, eyes will be on this week's CPI data and Powell’s comments about the months ahead during his testimony to congress this week. The markets are currently factoring in a September rate cut at 72% and a 3% chance of no cut before year end. Can Powell pull off the “Soft Landing?” (Pensford).

Supply Levels “Bay Area median sales exceed $2 million for first time”

Our calls for more Inventory were answered last quarter, which as a result has taken some steam away from the price appreciation that we saw in the first quarter of the year. For perspective, in May we saw the largest, single month, increase in New Inventory since early Q1 2021. You’ll also notice the staggering increase in inventory compared to this time last year. However, we still remain about 20% below pre-pandemic inventory levels at the halfway point for the calendar year. 

New Listing/Mo



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*MLS data provided | Single Family Homes | Santa Clara County

Home values were the big story for the second quarter, as April and May set Santa Clara county records breaking the $2,000,000 mark for the first time in history (NBC Bay Area). The previous high was in May of 2022 at $1,950,000 when interest rates were still in the low 3% range. However, with seasonal norms and the recent increase in inventory we expect home values to trend down slightly between now and year end.

Median Sales Price ($)



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*MLS data provided | Single Family Homes | Santa Clara County

We anticipate that the summer months will present an opportunity for buyers. Should the Federal Reserve decide to cut rates in September, we expect an increase in demand. With inventory levels likely to decrease from their spring highs, the coming months could offer a favorable buying window due to a wider selection of properties. Additionally, many buyers tend to experience fatigue during the summer, often prioritizing vacation plans over house hunting, which in turn reduces demand.

Please let us know if you have any real estate related questions. If we can’t answer them we’ll make sure we introduce you to an industry professional who can. 

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