California Housing Market for September, and 2023 Annual Prediction

 According to California Association of Realtors report on current sales and pricing for September, the existing home price in September for Southern California was $783,380, a year to year increase of over 3%, but existing home sales slipped since last May and are down over 32% year to year.  Sales dipped as rates climbed - pending sales fell more than 40% as mortgage rates hit 20-year high.

So Calif Housing Prices/Sales

The California median price is up from last year, but dipped to a seven month low, $821,680 and the median price for a condo/townhome is $620,000.  The sales price to list ratio dipped to the lowest level since 2019, and the share of homes selling above asking price was 28.3% vs. 72% in the Spring of 2022.

In Los Angeles County in September, approximately 30% of homes sold over list price, the highest being San Francisco County at 64%.  

While inventory slipped a little, it's still comparable to pre-pandemic levels of being under 3 months (normal is 6 months, not seen since 2012).  Active listings have increased over last year but still lower than 2018 and 2019.  Southern California has seen the largest growth in active listings over all other California regions.   Time on market was a median of 22 days, double that of one year ago. Sales to list price ratio was 97.7%.  The median reduction amount for reduced price listings was 5.6% while 44.5% of listings had a reduced price.

2023 Calif Housing Forecast

The October annual CAR forecast at the Long Beach Convention Center predicts an overall softening of the housing market for 2023 by about 7%, where the median price is $758,000 vs. the current $821,680. This may be a relief for some buyers, however the 30-year Fixed Interest Rate is predicted at 6.6%, and in recent days has threatened to increase even more.  Buyers may be interested to know that mortgage lenders are bringing back programs that will help some buyers with grants, etc., to help their buying process.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Housing Update in Los Angeles County and Southern California

Interest rates and inflation are issues right now, not just here but globally.  Older populations in some other countries are problematic, without replacement population the consumer consumption is less. 

In the U.S., the Fed is trying to slow down inflation with rate hikes on many instruments, such as credit cards, but the Fed doesn't control the mortgage interest rates, per se.  Mortgage interest rates were over 6% in June, but are now down to just over 5%, with it being an extremely volatile market.  6.5% is a slight buyer's market, 4.5% is a slight seller's market. 

Do two negative quarters of the GDP indicate a recession?  The National Bureau of Economic Research calls the recession, and doesn't use the model of two negative quarters, but uses several other combined market indicators which it says are not yet flashing red. The jobs statistics came out very strong, and with current consumer consumption, which accounts for 70% of the U.S. economy, keep from calling a complete recession.  And recession doesn't equal a housing crisis, with interest rates going lower there is an increasing demand for housing.

Inventory in Southern California has climbed from 10,000 listings in January to over 30,000 listings in August.  The peak is projected to be in September, which means we are not yet back to pre-COVID market norms. In Los Angeles County, 31% of inventory has reduced its price, due to the current market shift and slow down.   Last year time on market was 33 days, today it's 77 days in Los Angeles County, which is still considered a seller's market, 90-120 days on market is considered a balanced market, and above that is more of a buyer's market.

Sellers:  Rather than reduce your price, offer the buyers a rate buy down.

Thanks to Steven Thomas for his excellent Housing Market Report.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Los Angeles County Housing Market for January 2022

• Single family house median price is up 13.6% since January 2021. 
• For 24 months there has been less than 4 months of housing supply, for the last year there's been less than 2 months supply, currently 1.2 months supply. 
• January 2021 there were 7,862 houses, currently 5,215 houses on market (active listings). 
• Days on market last January: 28 -- days on market; January 2022: 29 -- one day longer. (47 days in Jan. 2019).
  
• Average percent of original list price received this January was 102.7% (2.7% over list price).
• Number of showings per listing this January was 5.9-- last January it was 6.5 showings per listing. 
• Of 3,139 SFR sales in Los Angeles County this January, 17% were all cash.
• Only 2% of the 3,139 sales were contingent upon buyer's sale of a home.
  
• Median list SFR price was $860,000--median closed price was $895,000 for this January.
• Buyers see on average of 10.1 houses before going into contract, but the median is 2 showings.
  
•  (Data as taken from CRMLS)
  
  
  
  
•  Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Annual Housing Market Report by California Association of Realtors (October 7, 2021)

California Association of Realtor Annual Market Report was presented at the annual trade conference last week, held online for the 2nd year--and here are some of the highlights.

Takeaways:

As of August 2021, 67% of all sales closed over list price (up from about 50% at beginning of 2021).

Median price of single family home in August was $827,940.

Median down payment by repeat buyers was 20%, and 32% of first time buyers have 20% down or more.

Number of sales down to 414,860 in August.

People are buying larger homes, median is over 1800 sq ft.

Years in home before selling is now over 10 years, due to affordability challenges, relocation questions, low rate on current mortgage, low property taxes, hit on capital gains--not as many people move compared to 2000.

Million dollar home market is now 28% of sales.

23% of Californians can buy a median priced home -- affordability issue for California.

California is not issuing enough new housing permits.

Homeownership rates vary by ethnicity. 

All time low levels of housing inventory in December, 2020.

Technology, iBuyers and corporate consolidations, as well as changes to MLS portals, and other industry legal issues all involve new ways of doing business.

California housing crisis:  In 1986 population was 27 million--in 2020 population was 40 million; number of Realtors in 1986 was 112,000 and in 2020 there were 206,000 Realtors; in 1986 there were 394,000 home sales and in 2020 there were 412,000 home sales; in 1986 256,000 housing permits were issued and in 2020 100,000 housing permits were issued.   So, almost double the number of Realtors, and 13 million more people, but much slower increase in home sales and big decrease in housing permits.

Overall price outlook for 2022 as of August 2021:  in 2021 the median home price increased 6.8% -- the median price for 2022 is projected to be a decrease of 5.2%, putting median home price at $834,000; with the 30-year fixed rate mortgage not over 3.5 for 2022.

For the complete Power Point on this presentation, please contact me.

See:  Investor buyer have contracts too

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996