July 14, 2024

Southern California Housing Market Weakest June in 5 years!San Diego Residential Property Outlook - Southern California Housing Market

Sales fell 6.9% in June compared with May and were down 8% annually, according to CoreLogic. That is the slowest June pace since 2014. Historically, sales usually gain an average 5.8% from May to June.

The median price for all Southern California homes sold in June rose to a record $541,250, up 1.2% compared with a year ago. That is the smallest June gain since 2011.

Sales have been falling on a year-over-year basis for 11 straight months. Making the decline in sales even more surprising was the fact that home mortgage rates also fell more than 50 basis points over the past three months. Usually when home mortgage interest rates decline, housing becomes more affordable, and the entire residential housing market activity picks up.

Despite the lower mortgage rates and a healthy economic backdrop, the market was sluggish, suggesting many would-be buyers remained priced out or concerned about buying near a possible price peak,” wrote Andrew LePage, a CoreLogic analyst, in a release.

LePage noted one caveat — that there was one less business day in June compared with a year ago. Even with that adjustment, however, sales would have come in 5% lower annually.

Southern California Housing Market

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The culprit is clearly prices. The median price for all Southern California homes sold in June rose to a record $541,250, up 1.2% compared with a year ago. That is the smallest June gain since 2011.

– Existing, single-family home sales totaled 389,690 in June 2019 on a seasonally adjusted annualized rate, down 4.2 percent from May and down 5.1 percent from June 2018.

– June’s statewide median home price was $611,420, virtually unchanged from May and up 1.4 percent from June 2018.

– Year-to-date statewide home sales were down 5.9 percent in June.

 From C.A.R.’s June 2019 resale housing report:

  • At the regional level, sales fell from a year ago in all major regions on a non-seasonally adjusted annual basis, with the Central Valley recording the largest drop at 9.4 percent. Sales fell 8.8 percent in the San Francisco Bay Area and 8.4 percent in the Los Angeles Metro region. The Central Coast region experienced a 6.4 percent decline, while the Inland Empire recorded a 5.2 percent decrease.
  • In the San Francisco Bay Area, only Napa County recorded a non-seasonally adjusted annual sales increase at 19.2 percent, while sales were essentially flat in Sonoma County. The seven remaining counties experienced declines ranging from the low single-digits in Marin to a 21 percent dip in San Francisco.
  • Home sales in Southern California were down 9.1 percent, with every county outside of Ventura (0.6 percent) posting declines. Los Angeles (-12.6 percent), San Diego (-12.5 percent), Orange (-7.6 percent) and San Bernardino(-7.2 percent), and Riverside (-4.0 percent) counties all recorded sales declines.
  • At the regional level, median home prices were up from a year ago in all major regions except for the San Francisco Bay Area, which saw an 8.1 percent decline. Only San Francisco County recorded a solid 8.8 percent year-over-year price increase, while elsewhere in the nine-county region, prices followed the statewide trend of cooling price growth.
  • In Southern California, only Ventura County experienced a year-over-year price decline. Other counties in the region recorded annual price growth ranging from 0.8 percent in Orange County to 5.7 percent in San Bernardino.
  • Median prices improved from the prior year in all Central Valley region counties, even as the region posted the weakest sales.
  • Active listings, which have been decelerating since December 2018, grew 2.4 percent from a year ago — the smallest increase since April 2018.
  • The number of homes available for sale has moderated significantly, suggesting that market is getting back toward being more balanced between supply and demand — but inventory remains relatively tight from a historical perspective. The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was 3.4 months in June, up from 3.2 months in May and up from 3.0 months in June 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
  • The median number of days it took to sell a California single-family home increased in June. Time on market inched up from 18 days in May to 19 days in June. It took a median number of 15 days to sell a home in June 2018.
  • C.A.R.’s statewide sales-price-to-list-price ratio* was 99.2 percent in June 2019 compared to 100 percent in June 2018.
  • The average statewide price per square foot** for an existing, single-family home statewide reached $292 in June 2019 and was $290 in June 2018.
  • The 30-year, fixed-mortgage interest rate averaged 3.8 percent in June, down from 4.57 percent in June 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.48 percent, compared to 3.82 percent in June 2018.

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Southern California Housing Market