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©2018 BY JEANNIE SATTLER - REALTOR.  CA BRE LIC# 01502752

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CA Market Update - Just the Facts

August 15, 2018

 

 

Statewide CA:

● Home sales decline 7.3% year over year June 2018 v June 2017 (second consecutive month)

● Statewide sales declined in every segment below $1M

● Median price $602,760 up 8.5% and reached an all-time high

● Inventory at 3 months ~ up from 2.7 months year over year

● Active listings at highest level in more than 2 years

● Days on market at record low of 15 days

● 38% of listings saw price reductions on average of 4.2%

 

 

 

▪ Third consecutive month of the year-over-year decline in home sales

▪ 2.2% below a year ago at 5.38M seasonally adj

 

 

 

▪ Inventory at 4.3 months of supply…up .5% over previous year

▪ First Y/Y increase in 37 months

 

 

 

▪ Median EHS price up 5.2% over 2017 ($264,800)

▪ Prices have increased year-over-year for 76 consecutive months

 

 

▪ Days on market: 26

▪ 58% of homes were on the market for less than one month

 

 

 

 

▪ First-time homebuyers 31% of the market

▪ Down from 34% in 2017 and a long-term average of nearly 40%

▪ Home affordability: 141.2 v 157.2 (100.2 in the West v 112.9)

 

 

▪ Housing starts/completions

▪ Demand has outstripped supply since 2007

▪ 1M household formations over the last year

▪ 873K housing units completed (compared to 2M in 2004)

▪ Current pace of completions is 1.29M…closing the gap (800K gap in 2016)

 

 

▪ 30 Year conventional fixed rate mortgage: 4.57% (up from 3.99% for 2017)

▪ 10 Year US Treasury Bond: 2.96 V 2.37 a year ago

▪ Home price growth outpacing wage growth 2 to 1 (5.2% v 2.6)

▪ Homeownership rates: 64.2% V 50 Year Average of 65.24%

▪ Economy is strong at many levels (GDP, Employment, Cons Spend)

 

 

What’s it all mean?

▪ 3 mos a trend does not make…however its worth watching

▪ Inventory is the industry’s greatest challenge….

▪ Home affordability will impact buyer sentiment (interest rates and home prices)

▪ Reduced first time buyers and lack of inventory will impact move up market

▪ As a seller….there’s no better time to sell

▪ Buyers….I will help you understand these market trends

▪ Every market is local and sometimes hyper-local

 

Is a Bubble on the Horizon?

Remember the facts

▪ Prices outpacing wage growth

▪ Housing completions catching up and closing the gap

▪ Interest rates rising – 10 year treasury rising

▪ Home affordability seeing dramatic declines

▪ Smart buyers are smart buyers

 

My prediction…..Nationally

Over the next 6 - 12 months...

▪ Pace of sales begins to slow

▪ Homeownership rates grow but still below the 50 year historical average

▪ Inventory will close in on demand

▪ Price appreciation will slow and flatten in coastal markets

▪ Buyers will sit on the sideline

 

In 2019 - 2020... 

▪ More sellers hitting the market trying to catch the peak

▪ Inventory increases

▪ Price corrections will occur

▪ Slow but defined shift in the market

 

My prediction…..In CA

Now….

▪ Pace of sales begins to slow

▪ Inventory will increase as more sellers hitting the market trying to catch the peak

▪ Price corrections will occur

▪ Buyers will sit on the sideline

 

In 2019 - 2020...

▪ Inventory increases

▪ Defined shift in the market

▪ No significant decline but a noted correction

 

Some of the information obtained from the California Association of Realtors. The information is solely informational and should not be substituted for medical, legal, financial or tax advice. Information is believed to be accurate, but not guaranteed.

 

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