We’ve had quite a surge this year!
We’ve had quite a surge this year!
We’ve had quite a surge this year!
Our head cheerleader keeps saying that the lower inventory is the main reason why there have been fewer home sales nationwide:
Lawrence Yun, chief economist at the National Association of Realtors, says “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget.”
Is that the case between La Jolla and Carlsbad?
Here is the history, with a bubble-look-back to the 2007 stats too:
NSDCC Total Listings and Sales, Jan 1 to July 31:
We have had 11% fewer listings this year, but 2% more sales than in 2016!
The higher prices don’t seem to be getting in the way either!
Why does Yunnie keep babbling on with his nonsense? It’s because the realtor industry never wants to mention how critical the price is to the equation.
Price will fix anything!
All we really know is that more sellers and buyers have been willing to come together on price this year – and in a frenzy-like fashion, similar to 2013!
Last month’s sales count looks like it is going to be less than previous Julys – the graph above has an extra 10% added to today’s count for late-reporters and it still comes in under the last four Julys.
However, the May and June sales this year were outstanding – overall, the sales from the last three months measure up pretty well:
NSDCC May-July Sales
2017: 933 (plus 20-30 more to be added by late-reporters)
This year’s three-month total could be the highest since the Frenzy of 2013, which would be remarkable considering that prices are about 30% higher today!
An excerpt from this article:
Home prices have now been rising for more than five years, the result of a growing economy, rock-bottom mortgage rates and a shortage of homes on the market. Economists said that absent a recession or a surge in mortgage rates, California home prices could keep climbing at 5% a year for the foreseeable future.
That’s faster than the long-term average of 3% nationwide, but it’s difficult to build housing in California and the economy is strong, said Richard Green, director of the USC Lusk Center for Real Estate.
“It could go on for another four or five years,” he said.
CoreLogic’s report showed that home prices in Southern California rose in every county last month compared to a year earlier, not just in Orange and Los Angeles counties.
In San Bernardino County, the median was up 12.3% to $320,000; in Riverside County, 7.5% to $357,000; in Ventura County, 2.7% to $565,000; and in San Diego County, 9.8% to $543,500. Across the region, sales rose 4.3%.
Chris Thornberg, founding partner of Beacon Economics, said he doesn’t expect a recession and thus doesn’t foresee a time when home prices stop rising.
“Candidly, the only thing that could upset the apple cart in California is if we build a whole bunch of housing and that’s as likely as an alien attack.”
In the last post we saw that the median sales price for San Diego is up 11.2% year-over-year. Let’s check the individual areas between Carlsbad and La Jolla, using the combined May/June Y-O-Y data for larger sample sizes:
Comparing the sales counts is the best way to gauge the overall health of the market, and they are looking good in all areas.
Neither of the price metrics are that great, but in areas where both are heading in the same direction suggests a trend.
As the national drought in home supply dragged into its 21st straight month, competition among buyers drove prices up once again.
And the fiercest competition was in the Bay Area.
A new report from Redfin shows that 73.7 percent of homes sold above the listing price in the San Jose metropolitan area in June. That was the highest percentage in the nation, followed by the San Francisco metropolitan area (70.6 percent, second highest in the U.S.) and the Oakland metropolitan area (69.8 percent, third highest). They were followed by Seattle (62.3 percent) and Tacoma, Wash., (52.6 percent).
“Every record in market speed and competition that was set in May was broken again in June,” the report stated.
The Redfin report comes two days after the Mercury News reported on a rash of over-asking home sales in Sunnyvale and Cupertino. In the last month, more than 50 homes in those two cities sold for at least $200,000 over the asking price. One modest Cupertino house — 1,046 square feet — sold for $660,000 above its listing price.
According to Redfin, San Jose had the nation’s largest decrease in housing inventory, falling 42.2 percent in June from one year earlier. The second largest year-over-year contraction of the home supply was in Rochester, N.Y., where inventory fell 29.7 percent. The third largest shrinkage happened in San Francisco, where inventory fell 26.6 percent.
Read full article here:
Sales have been remarkably steady for the first half of the last three years, with only a slight variance in the sales count:
In the first half of 2012, there were 331 houses that sold under $600,000.
This year we had 11.
Note that last time the rise in prices was quicker (steeper curve), and it only took about a year – 2006 – to reverse course.
This time, the increase looks more reasonable (more-gradual slope), but it still has to look daunting to buyers.
The C.A.R. is using a new metric – market velocity, which is what we’ve used here frequently to compare monthly solds to new listings:
Market Velocity – home sales relative to the number of new listings coming on line each month to replenish that sold inventory – continued its upward momentum in May, suggesting that home prices should grow further in the upcoming months. It is strongly correlated with increases/decreases in price growth with a roughly three- to six-month lag time.
It’s an imperfect measurement because the new listings each month don’t necessary have a direct relationship to those sold – very few are in both categories in the same month. But comparing the rate of change to previous months and years gives us some warning about what’s coming.
Here’s how the NSDCC market (La Jolla to Carlsbad) is shaping up:
This year’s momentum has been slightly better than last year, though not by much. We have had a fantastic week of closings too, and this month’s sales should match or exceed last year’s by the time the count is complete!
The number of new listings this month looks dramatically low, but the count should get into the mid-400s when the final count is in. No flood of supply yet!
We’ve had it so good for so long, we’re bound to have some bouncing around. Our cheerleaders want to make it black and white = sales down, prices up:
California pending home sales stumble for fifth straight month in May
LOS ANGELES (June 28) – Even with a strong performance in May closed escrow sales, California pending home sales fell for the fifth consecutive month, suggesting the state’s housing market may underperform over the next few months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Along with the decline in pending sales, REALTORS® are more cautious due to their growing concern over supply and affordability issues, C.A.R.’s May Market Pulse Survey** found. REALTORS® also saw fewer floor calls, and less open house traffic than in April.
Pending home sales data:
• Based on signed contracts, year-over-year statewide pending home sales fell for the fifth straight month in May on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 3.9 percent from 123.0 in May 2016 to 118.1 in May 2017. On a monthly basis, California pending home sales increased 3.9 percent from the April index of 113.7.
• Despite a bounce back in May closed escrow sales, the downward trend in pending sales suggests the housing market may underperform over the next few months. With interest rates expected to rise in the second half of the year, the sales momentum could slow further or even shift in the third and fourth quarters.
• The Southern California Region reversed a three-month decline and posted a 1.3 percent improvement in pending sales from the previous year, aided largely by healthy gains in Orange and Riverside counties, which marked increases of 12.5 percent and 8.4 percent, respectively. Pending sales in San Diego, San Bernardino, and Los Angeles counties declined from last May, but those counties had drops of less than 5 percent.
• The Central Valley also posted a slight gain in May, increasing 2.1 percent. With many counties in the region falling behind last year, pending sales in the region as a whole would have declined year over year if not for solid sales in Fresno, which increased a robust 28.6 percent from last May. Kern County saw pending sales slip by 2.9 percent from May 2016.
• On the flip side of the coin, the San Francisco Bay Area experienced a decline in pending sales in May, falling 5.5 percent on an annual basis. Pending sales in San Francisco County declined the most at 10.8 percent, and San Mateo and Santa Clara counties posted pending sales decreases of 0.7 percent and 2.4 percent, respectively as inventories remained extremely low and median prices exceeded $1 million.
• In C.A.R.’s newest market indicator of future price appreciation, Market Velocity – home sales relative to the number of new listings coming on line each month to replenish that sold inventory – continued its upward momentum in May, suggesting that home prices should grow further in the upcoming months. Solid demand motivated by low interest rates, coupled with tight supply, put upward pressure on prices in the last few months as the home buying season remained competitive. The statewide median price should remain near its recent high until late summer or early fall. Market Velocity is strongly correlated with increases/decreases in price growth with a roughly three- to six-month lag time.