Inventory Down But Sales Are Strong

by Jim the Realtor | Jul 26, 2020 | Forecasts, Jim's Take on the Market, Sales and Price Check | 0 comments

San Diego County isn’t included in the graph above but the trend is similar.  The author is happy to point out the negatives, but with inventory still well under what it was last year and pandemic/unrest raging, it’s a miracle that sales are so strong. San Diego County had 3,557 sales last month, which was only down 2.4% from June, 2019, and the median sales price of $600,250 was up 1.7% YoY.

We only have about a month left of prime homebuying before buyers get distracted by school starting and election fervor.  With more inventory and rates in the 2s, the next 30 days should be the best of the year!

Are Southern California homeowners back in a selling mood?

Zillow’s weekly report on activity from brokers’ listing services in Los Angeles, Orange, Riverside and San Bernardino counties shows owners listed 5,117 existing homes for sale in the week ended July 18. My trusty spreadsheet tells me that’s up 3% vs. the previous week. But this nugget is more noteworthy: It’s the largest addition to the for-sale inventory in 19 weeks.

One unsolved puzzle of the pandemic-riddled economy is why homeowners have refused to be sellers. Were they fearful of home showings? Or skittish about looking for another home to buy? Or perhaps they’re unsure of their own finances?

Even with a recent jump in new listings — the highest since March 7 — the week is down 13% vs. a year earlier. And the four-county inventory of everything a house hunter could buy was 27,170 this week — off 32% in a year. Limited supply may be one reason sales have slumped over the past three months.

Perhaps these newly eager-to-sell owners are reacting to new escrows: 3,696 existing homes were under contract last week, 6% more than the previous seven days.

It’s the 11th positive week for pending purchases out of the last 13 as the housing market rebounds from economic turmoil created by “stay at home” orders designed to slow a pandemic’s spread.

Let’s note that a rapidly uncertain employment picture could be overpowering the record-low mortgage rates that have put some house hunters in a buying mood. California’s U-turn on business reopenings doesn’t help consumer confidence.

And do not forget: Pending sales typically require numerous approvals, most notably from lenders, before the sale closes. June 2020 was the slowest June for closed sales in Southern California in the DQNews database that dates to 1988.