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Will lower mortgage rates save California’s housing market?

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Will lower mortgage rates save California’s housing market?


Will lower mortgage rates convince California house hunters to stop balking at unaffordable homes on the market?

What’s next for interest rates is a heated, national debate.

The Federal Reserve is taking a cautious approach to further cuts in the rates it controls, fearing ongoing trade wars could reignite problematic inflation. Fed critics, most notably President Donald Trump, think rates are too high and the Fed should be aggressively cutting.

Political theater aside, what might lower rates mean for California’s housing market? And remember, Fed cuts don’t always lower what mortgage borrowers pay.

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Let me remind you, and not for the first time, that a historical perspective suggests that cheaper money is not a perfect cure. You see, bargain financing has a bad habit of arriving when the economy is in disarray.

To see what’s up – or down – with the market, my trusty spreadsheet looked at statewide homebuying data from the California Association of Realtors, the average 30-year mortgage rate from Freddie Mac, and government job statistics.

These economic indicators were divided into three groups dating back to 1990 to gives us a view into how homebuying performed in 12-month periods – when rates fell the most vs. when financing costs increased significantly.

During these 36 years, rates averaged a drop to 5.5% from 6.5% in their gaudiest declines. Within the largest significant rate increases, mortgages averaged a jump to 6.2% from 5.2%.

Rate changes

When rates drop, house hunters get busy.

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The number of single-family homes sold averaged a 5% one-year gain during the biggest rate cuts since 1990. However, sales decreased by an average of 6% when rates rose sharply.

But there’s a catch: Sales declined in 34% of these 12-month periods when rates tumbled.

And look out for cooler appreciation.

The statewide median home price rose an average of 4% in the years when rates tumbled since 1990, but it increased at a 7% annual pace when rates jumped.

Plus, prices dipped 20% of the time when rates fell sharply.

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Cheaper money can also alter the number of options house hunters have to choose from.

Inventory, as measured by days on market, fell by an average of 11% when rates tumbled in 36 years, but rose 12% with rate jumps. Elevated buying may have gobbled up supply.

And buyers’ timing can change.

Days on market sped up by four days on average with declining rates since 1990, but selling times increased by four days when rates jumped.

Affordability matters. Estimated house payments fell 5% on average with declining rates but increased by 18% when rates rose.

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Tricky juggle

Do not forget real estate’s three keys: “Jobs. Jobs. Jobs.”

When mortgage rates took their deepest dives during the past 36 years, the number of California workers fell by 0.4% on average, as California unemployment rose to 8.2% from 6.8%.

Buying a California home requires a solid paycheck.

Consider how employers statewide hired when rates soared since 1990. Jobs grew at a rate of 2.4% annually, as unemployment dropped to 5.8% from 6.5%. Those extra paychecks create potential house buyers.

So it’s a tricky juggle between real estate’s thirst for cheaper money and its need for a healthy job market.

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Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com



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Dramatic explosion caught on video destroys homes, injures six, officials say

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Dramatic explosion caught on video destroys homes, injures six, officials say


A natural gas line leak triggered a dramatic explosion that destroyed a Bay Area home on Thursday, injuring six people and damaging several other properties.

At least one person was inside the home before it was leveled in the blast. The individual managed to escape without injury, but six others were hurt, including three who suffered serious injuries, Alameda County Fire Department spokesperson Cheryl Hurd said.

“It was a chaotic scene,” Hurd said. “There was fire and debris and smoke everywhere, power lines down, people self-evacuated from the home. … Someone was on the sidewalk with severe burns.”

The leak started after a third-party construction crew working Thursday morning in the 800 block of East Lewelling Boulevard in Hayward struck a Pacific Gas and Electric underground natural gas line, according to a statement from the utility.

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Fire crews were first dispatched to the scene at 7:46 a.m. after PG&E reported a suspected natural gas leak, Hurd said. PG&E officials were already on scene when fire engines arrived, and reportedly told firefighters their assistance was not needed, Hurd said.

Utility workers attempted to isolate the damaged line, but gas was leaking from multiple locations. Workers shut off the flow of gas at about 9:25 a.m. About ten minutes later an explosion occurred, PG&E said in a statement.

Fire crews were called back to the same address, where at least 75 firefighters encountered heavy flames and a thick column of smoke. Surrounding homes sustained damage from the blast and falling debris. Three buildings were destroyed on two separate properties and several others were damaged, according to fire officials.

Six people were taken to Eden Medical Center, including three with severe injuries requiring immediate transport. Officials declined to comment on the nature of their injuries.

Video captured from a Ring doorbell affixed to a neighboring house showed an excavator digging near the home moments before the explosion. The blast rattled nearby homes, shattered windows and sent construction crews running.

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Initially, authorities suspected that two people were missing after the blast. That was determined not to be the case, Hurd said.

“They brought in two cadaver dogs looking to see if anyone was still trapped under the rubble, and the dogs cleared everything,” Hurd said.

Brittany Maldonado had just returned from dropping off her son at school Thursday morning when she noticed a PG&E employee checking out her gas meter. He informed her that there was an issue and they had to turn off the gas to her home.

She didn’t think twice about it.

“About 45 minutes later, everything shakes,” she told reporters at the scene. “It was a big boom…first we think someone ran into our house—a truck or something—and then we look outside and it’s like a war zone.”

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The house across the street was leveled, Maldonado said. When she watched the footage from her Ring camera she said it looked as though a bomb inside the home had gone off.

“I’m very glad that no one lost their lives,” she said.

Officials with the Sheriff’s Office, PG&E and the National Transportation Safety Board are continuing to investigate the circumstances that led to the explosion.

In 2010, a PG&E pipeline ruptured in a San Bruno neighborhood, destroying 38 homes and killing eight people. California regulators later approved a $1.6-billion fine against the utility for violating state and federal pipeline safety standards.

Staff writer Hannah Fry contributed to this report

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Neil Thwaites promoted to ‘Vice President of Global Sales & California Commercial Performance’ for Alaska Airlines and Hawaiian Airlines – Alaska Airlines, Hawaiian Airlines and Horizon Air

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Neil Thwaites promoted to ‘Vice President of Global Sales & California Commercial Performance’ for Alaska Airlines and Hawaiian Airlines – Alaska Airlines, Hawaiian Airlines and Horizon Air


Thwaites will lead the strategy and execution of all sales activities for the combined Alaska Airlines and Hawaiian Airlines team. His responsibilities include growing indirect revenue on Alaska’s expanding international and domestic network, as well as expanding Atmos for Business, a new program designed for small- and medium-sized companies.

Thwaites joined Alaska Airlines in January 2022 as regional vice president in California. Since stepping into the role, Thwaites has significantly sharpened the airline’s focus and scale in key markets and communities across the state, strengthening Alaska’s position as we continue to grow in California. He will continue to be based at the company’s California offices in Burlingame. The moves take effect Dec. 13, with Thwaites also continuing to lead his current California commercial planning and performance function in addition to Global Sales.

Prior to Alaska, Thwaites worked in multiple positions within the airline industry, including a decade holding roles in London, New York, and Los Angeles for British Airways (a fellow oneworld member); most recently as ‘VP, Sales – Western USA’, where he was responsible for market development strategy and indirect revenue for both British Airways and Iberia across the western U.S.

Thwaites is originally from the United Kingdom and graduated from the University of Brighton with a double honors degree in Business Administration & Law.

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Tiny tracker following monarch butterflies during California migration

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Tiny tracker following monarch butterflies during California migration


SAN FRANCISCO (KGO) — When this monarch butterfly hits the sky it won’t be traveling alone. In fact, an energetic team of researchers will be following along with a revolutionary technology that’s already unlocking secrets that could help the entire species survive.

“I’ve described this technology as a spaceship compared to the wheel, like using a using a spaceship compared to the invention of the wheel. It’s teaching us so, so much more,” says Ray Moranz, Ph.D., a pollinator conservation specialist with the Xerces Society.

Moranz is part of a team that’s been placing tiny tracking devices on migrating monarchs. The collaboration is known as Project Monarch Science. It leverages solar powered radio tags that are so light they don’t affect the butterfly’s ability to fly. And they’re allowing researchers to track the Monarch’s movements in precise detail. With some 400 tags in place, the group already been able to get a nearly real time picture of monarch migrations east of the Rockies, with some populations experiencing dramatic twists and turns before making to wintering grounds in Mexico.

“They’re trying to go southward to Mexico. They can’t fight the winds. Instead, some of them were letting themselves be carried 50 miles north, 100 miles north, 200 miles the wrong way, which we are all extremely alarmed by and for good reason. Some of these monarchs, their migration was delayed by two or three weeks.

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According to estimates, migrating monarch populations have dropped by roughly 80% or more across the country. And the situation with coastal species here in California is especially dire. Blake Barbaree is a senior scientist with Point Blue Conservation Science. He and his colleagues are tracking Northern California populations now clustered around Santa Cruz.

MORE: Monarch butterflies to be listed as a threatened species in US

“This year, there’s it’s one of the lowest, populations recorded in the winter. And the core zones have been in Santa Cruz County and up in Marin County. So we’ve undertaken an effort to understand how the monarchs are really using these different groves around Santa Cruz by tagging some in the state parks around town,” Barbaree explains.

He says being able to track individual monarchs could help identify microhabitats in the area that help them survive, ranging from backyard pollinator gardens to protected open space to forest groves.

“So we’re really getting a great insight to how reliant they are on these big trees, but also the surrounding area and people’s even backyards. And then along the way around the coast, how they’re transitioning among some of these groves. And we’re looking for some of the triggers for those movements. Right. Why are they doing this and what’s what’s driving them to do that? So those questions are still a little bit further out as we get to analyze some more some more of the data,” he believes.

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And that data is getting even more precise. The tags, developed by Cellular Tracking Technologies, can be monitored from dedicated listening stations. But the company is also able to crowdsource signals detected by cellphone networks on phones with Bluetooth connectivity and location access activated. And they’ve also helped develop an app that allows volunteers, citizen scientists, and the general public to track and report Monarch locations themselves using their smartphones.

CEO Michael Lanzone says the initial response has been overwhelming.

MORE: New butterflies introduced in SF’s Presidio after species went extinct in 1940s

“We were super surprised to see 3,000 people download the monarch app. It’s like, you know, but people really love monarchs. There’s something that people just relate to,” says Lanzone who like many staffers at Cellular Tracking Technologies, has a background in wildlife ecology.

A number of groups are pushing to have the monarchs designated nationally as a threatened species. If that ultimately happens, researchers believe the tracking data could help put better protections in place.

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“They’re highly vulnerable to, you know, some of the different things that that that we as humans do around using pesticides and also potentially cutting, you know, cutting down trees for various reasons. Sometimes they’re for safety and sometimes it’s, you know, for development. But so having an understanding of how we can do those things more sensibly and protect the places that they need the most,” says Point Blue’s Barbaree.

And it’s happening with the help of researchers, citizen scientists, and a technology weighing no more than a few grains of rice.

The smartphone app is called Project Monarch Science. You can download it for free and begin tracking.

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