The 2018 forecast from the California Association of Realtors is out, and they are towing the company line as usual. They expect the statewide sales to increase 1% and the California median sales price to rise 4.2% next year.
How is San Diego County doing this year?
Here are the detached-home sales and median price for the first nine months of the year in San Diego County:
SD County Detached-Home Sales, January through September
My guess is for the San Diego County detached-home sales to drop 5% next year, and the median sales price to rise 5%. The drop in sales to be on the high-end.
What’s your guess?
The C.A.R. 2018 Forecast:
Voice of Real Estate: What will happen in 2018?
Posted by Taylor Thompson in Blog, News | 0 comments
No need for horoscopes, fortune tellers, palm readers, tea leaves, a psychic hotline or Madam so-and-so to predict the housing market in the future. Instead, the California Association of REALTORS® (C.A.R.) has the answers in its 2018 California Housing Market Forecast. The C.A.R. report was released this past week at the C.A.R. Expo, attended by nearly 6,000 people at the San Diego Convention Center (the C.A.R. Expo is the largest state real estate trade show in the nation).
With the economy expected to continue growing, housing demand should remain strong and incrementally boost California’s housing market in 2018, C.A.R. said. However, C.A.R. said a shortage of available homes for sale and affordability constraints will continue to be a challenge.
The California median home price is forecast to increase 4.2 percent to $561,000 in 2018, following a projected 7.2 percent increase in 2017 to $538,500.
“This year’s housing market can be told as a tale of two markets, the inventory constrained lower end and the upper end that’s non-inventory constrained,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “This trend is likely to continue into 2018 as active listings have declined across all price ranges for the past two years but is most obvious at the lower end.
“With tight inventory being the new ‘norm’ for the past few years and at least the upcoming year, we’ll continue to see fierce competition driving up prices, leading to lower affordability and weaker sales growth.”
C.A.R. also is expecting a modest gain in existing single-family home sales of 1.0 percent in 2018 year to reach 426,200 units, up slightly from the projected 2017 sales figure of 421,900. The 2017 figure is 1.3 percent higher compared with the 416,700 pace of homes sold in 2016.
“Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Geoff McIntosh. “However, a persistent shortage of homes for sale and increasing home prices will dictate the market as housing affordability diminishes for buyers struggling to get into the market.”
C.A.R. also said the average for 30-year, fixed mortgage interest rates will increase slightly to 4.3 percent in 2018, up from 4.0 percent in 2017 and 3.6 percent in 2016, but will still remain low by historical standards.
C.A.R.’s projections for median home prices this year are consistent with other real estate industry experts. CoreLogic said the San Diego County median price for single-family resales, condo resales and newly built homes in August was $535,000, which was lower than June’s figure of $545,000.
In other housing market news, San Diego County was ranked as the fifth “hottest” real estate market in the U.S. in September, with a typical home on the market only 39 days. San Diego moved up four places in the monthly ranking by the National Association of Realtors’ Realtors.com website. Nationally homes are on the market a median of 69 days, almost twice as long as in San Diego.
In other news from C.A.R, pending home resales in August declined 12.7 percent in San Diego County in a year-over-year comparison. August marks the end of the peak home-buying season, C.A.R. said. During the month, C.A.R. said that REALTORS® reported fewer floor calls, listing appointments, and client presentations, but open house traffic, however, remained strong.
According to C.A..R.’s recent Market Pulse Survey, fewer homes are selling below asking price. The share of homes selling above asking price increased from 29 percent a year ago to 31 percent in August, while the share of properties selling below asking price fell from 41 percent to 37 percent. The remaining 32 percent sold at asking price, up from 30 percent in August 2016. For homes that sold above asking price, the premium paid over asking price rose from 10 percent in August 2016 to 12 percent in August 2017. The 36 percent of homes that sold below asking price sold for an average of 12 percent below asking price in August, unchanged from a year ago.
Also, C.A.R. said the number of multiple offers is declining. About two-thirds (60 percent) of properties sold in August received multiple offers, down from 62 percent in August 2016, and the number of offers received was slightly down at 2.7 offers. The share of properties receiving three or more offers in August was 38 percent, compared to 42 percent a year ago.
NSDCC closed sales over $1,400,000 in the first nine months of the year:
Average 102 per month in 2017, and we have 623 for sale currently.
I think the six months’ supply means stagnant city is here, at least on the higher-end.
Would love to see a more specific breakdown of the $1.4M+ market. I am in La Jolla and from what I can tell anything decent between $1.4M and $2M sells quickly, but anything over $2M takes a while. The $1.4-$2M range seems to capture working professionals while over $2M starts getting into the real money.
My guess, home sales remain -2% due to a lack of inventory in the low end coupled by price increase in that sector. With a median sales price up 5.5% for 2018.
The lower end property will be very competitive. Lets take Encinitas, don’t think you are gonna find a SFR that is decent for under 800K anymore, next will be South Carlsbad which will be under 700K…that is coming. Good time to buy anything over 1.5 mil especially Cardiff and Rancho Santa Fe…good value for the money considering what new homes are going for, we are talking 800K for new San Marcos and up with any kind of a view. that city has really come up in the last five years.
I think for a second house, or rental you cannot go wrong with the beach areas, yea the price, but I think no matter what happens in the future people will always want to live at or near the beach and I don’t see rents tanking anytime soon. Interest rates are gonna up…3.6 to 4.0 this year, next I see towards the end of the year 4.5…in terms of interest that is a 12% increase in interest payments in terms of whole dollars…Lock it in now..while the money is still very cheap. 5years from now when we are at norm…which is 6.5% or more than 50% more interest if you consider 4% or thereabouts. We will see price fluctuation but at these rates lock and load at either 15 years or 30 years..
High end volume and price stagnant.
Median rises 8% because every low priced property disappears sold or doesn’t sell. Median rises 8% because median properties are going to be owner improved in order to command a higher price. Total volume however will drop 10% for the same reasons.
Carnac the Magnificent – I wonder if anyone still remembers.
“Sis Boom Bah” – “Describe the sound made when a sheep explodes.”
So, my grandpa used to play this card trick with me:
As a kid, I was astounded. For my money, my grandpa was magic. He knew what my secret card was! Every time! When I asked him how he did it, he’d say, “it’s just math.”
As I became more familiar with math, I realized that math isn’t magic. Furthermore, doesn’t care if your happy or sad, astounded or cynical. It just is. Math wasn’t chuckling along with my grandpa. A lot of Californians believe math is somehow sentient, or should be. Math either does, or should bend it’s rules for good people.
Math is going to let them down, becaaaause…. it doesn’t care.
California has fashioned itself as an immigrant destination state, with backing by most state and community leaders, as well as the Sierra Club, Greenpeace, and many other valiant folk whom the people trust.
A good indicator or where you’re going is to look back on where you’ve been, and…
Do the math…
It doesn’t matter what anybody says, or how they say it. Prices are going up in California for the next decade. Get on the train, our you’ll be left at the station with a comical look on your face. You like that fancy-pants condo in downtown LA? Buy it. You’re charmed by that little spread out amongst the desert scrub in Riverside? Get it. Anything around San Diego, don’t procrastinate. If you have the means to invest in rentals, indulge yourself.
Remember Fresno, back in the day? Remember when you were car sick, and your dad would say, “don’t throw up till we hit Fresno. Let’s show some courtesy for people.” Fresno is now a boom town.
Any reasonable area is up for grabs. Only thing I would suggest, if you want the most bang for your investment buck… follow the avocado toast. It’s darned powerful stuff.
Conclusions: Real Estate is heading up. Math doesn’t care about you, but avocado toast… is like a secret rich aging uncle who loves you. And Fresno, while getting expensive, still sucks.
No one ever sees ahead of time the event that comes and topples markets. I’m guessing that event happens in next 12 months. Therefore, prices will be down significantly following a stock market “correction” of 20-30%. Perhaps it’s one too many fed increases (not that that is what does it, but it will provide a good excuse for the powers to be to swiftly take er down).
Therefore, prices will be down significantly following a stock market “correction” of 20-30%.
For that to happen, it would take sellers who needed money like they need air to breathe, and have no ego. There won’t be any banks dumping on price – they learned their lesson last time; just stop foreclosing and wait it out.
Goldman, etc will get the stock market pumped up again after 2-3 years. It’s their racket.
It is almost as if financial events have been financialized. No room for small fish in the real estate ocean.
The next stock market event doesn’t lower prices only freezes activity.
Makes me so mad I want to drive a minivan into a swimming pool.
“Makes me so mad I want to drive a minivan into a swimming pool.”
Same here. Today, when I got my Filet-o-Fish sandwich at McDonald’s, they overcooked it again for the hundredth time. I wanted to peel back over there, and smear that Filet all over the window, chuck my coke right into the work area, and then throw my fries up in the air and yell, “yippee!” in pig latin, and then just drive away.
But I just ate it. It wasn’t that bad. Hopefully next time it will be better.
Junk food, no matter how well it’s cooked. 🙂
> Today, when I got my Filet-o-Fish sandwich at McDonald’s
Wait till Fridays. Fish sandwiches are half-price.