Yesterday, the C.A.R. released the statewide January results, with more speculation from our so-called leaders:
California home sales fall to lowest level in more than 10 years
– Existing, single-family home sales totaled 357,730 in January on a seasonally adjusted annualized rate, down 3.9 percent from December and down 12.6 percent from January 2018.
– January’s statewide median home price was $538,690, down 3.4 percent from December and up 2.1 percent from January 2018.
– Statewide active listings rose for the 10th straight month, increasing 27 percent from the previous year.
– The statewide Unsold Inventory Index was 4.6 months in January, up from 3.5 months in December.
“California continued to move toward a more balanced market as we see buyers having greater negotiating power and sellers making concessions to get their homes sold as inventory grows,” said C.A.R. President Jared Martin. “While interest rates have dropped down to the lowest point in 10 months, potential buyers are putting their homeownership plans on hold as they wait out further price adjustments.”
The statewide median home price declined to $538,690 in January. The January statewide median price was down 3.4 percent from $557,600 in December and up 2.1 percent from a revised $527,780 in January 2018.
“While we expected the federal government shutdown during most of January to temporarily interrupt closings because of a delay in loan approvals and income verifications, the impact on January’s home sales was minimal,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The decline in sales was more indicative of demand side issues and was broad and across all price categories and regions of the state. Moreover, growing inventory over the past few months has not translated into more sales.”
Obviously, they haven’t done a survey of the North San Diego County’s coastal region! Between La Jolla and Carlsbad, we had about the same number of January sales last month as we did in January, 2018, so we’re faring much better than the -12.6% statewide. We are further into February so let’s pick up the sales from the first half, and break it down by price category too:
NSDCC Detached-Home Closed Sales, Jan 1 to Feb. 15th
| Price Range | ||||||||
| Under $1M | ||||||||
| $1M to $1.5M | ||||||||
| $1.5 to $2.0M | ||||||||
| Over $2.0M | ||||||||
| Totals |
The only two signs of trouble:
- The Under-$1M market is disappearing.
- If you want to buy a house priced over $2,000,000, you sure have plenty to consider! Those sellers are happy to wait it out too, so no rush.
Other than those, we have remarkable balance, and it doesn’t look like ‘potential buyers are putting their homeownership plans on hold’ around here!
> The Under-$1M market is disappearing.
No. The under $1.0m market is now the under $1.5m market. The 2018 and 2019 under $1.5m are virtually identical.
The under $1.0m market is now the under $1.5m market.
It’s why I question general comments like this from our fearless leader – he should qualify this:
they wait out further price adjustments
There might be some deals on the high-end, but sellers on the lower-end are pushing higher.
More from our leaders:
Single-family home sales declined from 4.45 million in December to 4.37 million, putting them 8.4 percent lower on a year-over-year basis. Existing condominiums and co-ops sold at an annual rate of 570,000 units in January, up 3.6 percent from last month and down 9.5 percent from a year ago.
Analysts, pointing to lower mortgage rates and “an easy comparison against a very weak December” had expected at least a slight increase in January sales. Those polled by Econoday had forecasted in a range of 4.90 to 5.20 million, with a consensus of 5.04 million.
Lawrence Yun, NAR’s chief economist, acknowledged the sluggish sales, but said he does not expect the numbers to decline further going forward. “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
The median existing-home price for all housing types in January was $247,500, up 2.8 percent from the January 2018 median of $240,800. January’s price increase marks the 83rd straight month of year-over-year gains.
The median existing single-family home price rose 3.1 percent on an annual basis to $249,400. The median existing condo price was $233,000, an 0.1 percent annual gain.
Yun notes that this median home price growth is the slowest since February 2012 and cautions that the figures do not yet tell the full story for the month of January. “Lower mortgage rates from December 2018 had little impact on January sales, however, the lower rates will inevitably lead to more home sales.”
The inventory of existing homes for sale at the end of January was 1.59 million, up from 1.53 million in December and 1.52 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.7 months and 3.4 months respectively during the two earlier periods.
Properties remained on the market for an average of 49 days in January, up from 46 days in December and 42 days a year ago. Thirty-eight percent of homes sold in January were on the market for less than a month.
While it was the sixth straight month that the total inventory grew on a year-over-year basis, Yun says the market is still suffering from too few homes for sale. “In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed,” says Yun. “Taking steps to lower construction costs would be a tremendous help. Local zoning ordinances should also be reformed, while the housing permitting process must be expedited; these simple acts would immediately increase homeownership opportunities and boost local economies.”
“Decelerated sales and the increases in inventory will work in favor of potential homebuyers, putting them in a better negotiating position heading into the spring months,” said NAR President John Smaby, “On top of that, low-interest rates will bring an additional $80 per month savings compared to the rates of just a few months ago.”
First-time buyers were responsible for 29 percent of sales in January, down from last month (32 percent), but the same as a year ago. Investors purchased 16 percent of homes sold during the month, down from 17 percent in January 2018. Twenty-three percent of sales were all cash, up from 22 percent in both December and in January 2018.