Talk of recession: Housing is not going to be the cause, but it could be due to global economics, trade wars, geo-political crisis, and/or stock market correction. It could happen sometime in the future, there is no timetable.
According to a 2018/2019 Google Consumer Poll, 46% of 300 people thought it was a good time to sell.According to CAR's 2019 Housing Survey, though, 47% of properties in escrow fell out because the buyer decided not to buy, the next highest number was 6% representing people who did not qualify for a mortgage on buyer's terms, down to 1% for seller deciding not to sell.
Unemployment is at the lowest rate in 50 years, with Los Angeles County and Orange County at 4.5% or lower.
Interest rates are at historic lows, will remain lower in 2020, per this report.
Nonfarm job growth in California is lower than 2015, under 2%, unemployment lower than 2015, the population is almost 1 million higher than 2015, and population growth at .5% is lower than in 2015.
The highest sales volume is in the $500k to $749k range in California, with 46% of house sales taking place in Southern California, although sales growth in all regions is down compared to previous year.
The California median single family home price for existing homes was at an all time high in August of 2019, at $617,410. The SFR inventory supply improved only at the upper end of the market, so prices over $1 million and $3 million increased 4.5% and 10.8%, respectively. Houses under $299,000 decreased by 17.5%, with inventory decreases in price ranges all the way up to $999,000.
Overall, for the last 15 years California's sales are mostly flat, in spite of a strong economy, low interest rate, and low population growth.
Why? Well, because fewer permits were issued : in 1988 over 255,000 permits to build were issued, while in 2018, just over 114,000 permits were issued, while the population grew about 12 million in that time period. Limited land, density resistance, project review delays are all possible contributors to this condition.
In spite of rates dropping, buyers mortgage applications are down, and the projection is that by 2025 California will be a majority renter state. Los Angeles and Long Beach already fall into the 60% plus range for renters out of the total population.
The market is not as competitive as in previous years, less than half of sales received multiple offers, compared to 2013 when about 70% of listings received multiple offers. Outmigration to other states continues, 750,000 people have left since 2010, with San Bernardino and Riverside Counties being popular relocation spots, and there are fewer investor flippers in the market, and fewer investors are selling their properties.
Sellers are staying put, average time in a home is now 11 years, much longer than in 2005 when it was about 5 years in the home.
And so where are we in the end for 2020? Here's the summary chart: The California median price is predicted to be $607,000 for a single family home (statewide) with a 2.5% increase in price growth, far lower than 2017.
For the complete report in pdf format, you may download here: CAR Housing Report by looking for the link to the report on my Market Trends Page.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
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