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Just what we expected – more homes for sale, and more priced wrong:
Only six months following the most competitive home buying season of all time, January data shows the U.S. housing market is off to a slower start in 2019. Although home prices are increasing, 15 percent of U.S. listings had price cuts in January, and declines in days on market have significantly decelerated since last year.
The U.S. housing market is off to a slower start this year in many markets, compared to the rapid acceleration we saw last January. Although the market is slowing, it’s important to remember that we’re coming off of four straight years of inventory declines that pushed the market to a record low availability of homes for sale. The real metric to keep an eye on is entry-level homes, which are the key to getting today’s market back in balance. These homes are still in short-supply.
https://www.realtor.com/research/january-2019-data/
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Keep an eye on the entry-level homes? Let’s look at all of them!
Active listings of detached-homes between La Jolla and Carlsbad:
| Date, Year | ||||
| Jan 29, 2018 | ||||
| Jan 28, 2019 | ||||
| % change |
Our percentage of ‘entry-level’ inventory has grown the most, year-over-year, though with the cheapest home listed at $665,000, they aren’t exactly affordable to the masses.
Though we will have more homes sitting around not selling, buyers will forget them quickly and easily – as long as at least a few homes are selling that will give direction to all involved.
The housing market’s chill grew colder in December, as sales plunged across Southern California and home prices barely rose.
The number of closed deals fell 20.3% compared with a year earlier, hitting the lowest level for a December since the start of the Great Recession and marking the sharpest percentage drop since 2010, according to a report out Wednesday from CoreLogic.
“The affordability issue,” said Leslie Appleton-Young, chief economist for the California Assn. of Realtors, “is finally taking its toll.”
Some experts, however, do think values could dip under current economic conditions, arguing home prices have simply outpaced incomes for too long. Richard Green, director of the USC Lusk Center for Real Estate, has said prices could fall 5% to 10% over the next two years. The Realtors group predicts prices across the state will be essentially flat this year, falling 0.2% from 2018.
“The market is going to settle out,” Appleton-Young said. “You are seeing a big pause.”
Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA, said the Federal Reserve’s announcement Wednesday that it would be “patient” in enacting additional rate increases may help prevent mortgage rates from drifting higher. But at the same time, there are concerns over global growth and the cost of housing is already too high for many.
“Where do we go from here?” Gabriel said. “The [spring] selling season will be a very important indication.”
Tregg Rustad, a Rodeo Realty agent, said buyers are still willing to pull the trigger if a home isn’t significantly overpriced, at least by Los Angeles standards.
For example, in mid-January he listed a five-bedroom house in Mid-City for $1.76 million and said it’s now in escrow for about 3% above that amount. A year ago, he and the seller may have set the list price even higher, knowing there was a good shot home seekers would bite.
“Buyers are going to be careful” this year, he said. “They are tired of paying for more than a house is worth.”
No Compass bombshell at the IC conference in NYC – Brad the moderator didn’t stay on track and talk about the advertised topic, “Big Bets in 2019”.
My guess is that we’re going to give Zillow a run for the money this year.
Leslie is rarely right but never uncertain. Prices are the same, interest rates are the same. Inventory is better. I think she needs to look elsewhere. I would suggest that prices, rates stable and inventory growing the buyer’s sense of urgency is what’s missing.