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Southern California home sales plunge 20% in December to the lowest pace in 11 years
invite response
2019 Jan 30, 12:46pm 4,990 views 58 comments
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49
anonymous
2019 Mar 13, 4:53pm
California housing seen cooling further going into 2020: UCLA forecast
•While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, says the latest UCLA Anderson Forecast.
•The housing slowdown could put a damper on Democratic Gov. Gavin Newsom's plans to step up the pace of new homes built to help ease the state's housing shortage.
•The director of the forecast says home prices are falling in many major markets of the Golden State, calling the decline "widespread and substantial."
While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, according to the latest UCLA Anderson Forecast, released Wednesday.
"The housing markets are softening in California, and it's not just the tony neighborhoods of San Francisco, Silicon Valley and West LA," said Jerry Nickelsburg, an adjunct professor at UCLA and director of the Anderson School of Management's forecast. "This is a statewide phenomenon."
The economist said anticipated demand for housing throughout the state has been lacking despite the strength of the state's overall economy and positive trends in the job market.
Nickelsburg said the slowdown in the state's housing market also has implications for the California economy going forward. In addition, the housing slowdown could put a damper on Democratic Gov. Gavin Newsom's plans to step up the pace of new homes built to help ease the state's housing shortage.
"With our national forecast for slowing economic growth, continued discussion on when the next recession will be, and the Fed indicating that the peak of the interest rate cycle could be near, we now expect weaker housing markets into 2020," Nickelsburg wrote in the forecast report. "As a consequence, our forecast for housing starts in 2019 and 2020 has been revised downward, with a recovery in building beginning in 2021."
While the housing market is slowing, the state's job growth remains strong, according to the forecast. It said California's average unemployment rate is expected to rise to an average of 4.5 percent in 2019 with slower national economic growth, and then at a pace of 4.3 percent in 2020 and 2021.
California added the highest number of construction jobs nationally between January 2018 and 2019, according to the Associated General Contractors of America. The state added 28,500 jobs, or an increase of 3.4 percent during the period.
Meantime, Nickelsburg said home prices are falling in many major markets of the Golden State, calling the decline "widespread and substantial."
The economist said the impact of the cooling is even being felt in the Central Valley of California, where home sales have fallen by more than 10 percent.
In Southern California and the San Francisco Bay Area, home sales fell to an 11-year low in January, according to CoreLogic. The analytics provider reported sales have fallen on a year-over-year basis in the Bay Area the past eight consecutive months, while in Southern California sales have fallen on a year-over-year basis in the last six consecutive months.
At the same time, the nation's most populous state continues to suffer from a chronic housing shortage.
"Home prices are falling in California as is the level of building," Nickelsburg wrote. He said one possible explanation is "higher mortgage interest rates are depressing prices but not the underlying demand."
Another possibility behind the housing slowdown is prices are "so expensive that everyone (well a lot of everyone) is leaving," the economist added.
Newsom, who assumed the governorship in January, this week announced an updated plan to ease the state's "housing cost crisis." The Democrat proposed a $1.75 billion housing package, including $1 billion in loans and tax incentives to spur low-, mixed- and middle-income housing production.
The governor wants to build 3.5 million new housing units in the state by 2025, or an average of about 500,000 a year. But there were only about 120,000 new homes built in 2018.
Newsom is pressing cities and counties to meet those ambitious housing expansion targets. Some of the steps are controversial, such as threatening to take away transportation funds from cities that fail to meet targets.
https://www.cnbc.com/2019/03/13/california-housing-seen-cooling-further-going-into-2020-ucla-forecast.html
Anderson Forecast: http://newsroom.ucla.edu/releases/ucla-anderson-forecast-points-to-weaker-economic-growth
It's still not getting any better from these reports either
Someone took credit and ownership on the way up - they own it lock, stock and barrel on the way down as well, and it is going down.
•While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, says the latest UCLA Anderson Forecast.
•The housing slowdown could put a damper on Democratic Gov. Gavin Newsom's plans to step up the pace of new homes built to help ease the state's housing shortage.
•The director of the forecast says home prices are falling in many major markets of the Golden State, calling the decline "widespread and substantial."
While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, according to the latest UCLA Anderson Forecast, released Wednesday.
"The housing markets are softening in California, and it's not just the tony neighborhoods of San Francisco, Silicon Valley and West LA," said Jerry Nickelsburg, an adjunct professor at UCLA and director of the Anderson School of Management's forecast. "This is a statewide phenomenon."
The economist said anticipated demand for housing throughout the state has been lacking despite the strength of the state's overall economy and positive trends in the job market.
Nickelsburg said the slowdown in the state's housing market also has implications for the California economy going forward. In addition, the housing slowdown could put a damper on Democratic Gov. Gavin Newsom's plans to step up the pace of new homes built to help ease the state's housing shortage.
"With our national forecast for slowing economic growth, continued discussion on when the next recession will be, and the Fed indicating that the peak of the interest rate cycle could be near, we now expect weaker housing markets into 2020," Nickelsburg wrote in the forecast report. "As a consequence, our forecast for housing starts in 2019 and 2020 has been revised downward, with a recovery in building beginning in 2021."
While the housing market is slowing, the state's job growth remains strong, according to the forecast. It said California's average unemployment rate is expected to rise to an average of 4.5 percent in 2019 with slower national economic growth, and then at a pace of 4.3 percent in 2020 and 2021.
California added the highest number of construction jobs nationally between January 2018 and 2019, according to the Associated General Contractors of America. The state added 28,500 jobs, or an increase of 3.4 percent during the period.
Meantime, Nickelsburg said home prices are falling in many major markets of the Golden State, calling the decline "widespread and substantial."
The economist said the impact of the cooling is even being felt in the Central Valley of California, where home sales have fallen by more than 10 percent.
In Southern California and the San Francisco Bay Area, home sales fell to an 11-year low in January, according to CoreLogic. The analytics provider reported sales have fallen on a year-over-year basis in the Bay Area the past eight consecutive months, while in Southern California sales have fallen on a year-over-year basis in the last six consecutive months.
At the same time, the nation's most populous state continues to suffer from a chronic housing shortage.
"Home prices are falling in California as is the level of building," Nickelsburg wrote. He said one possible explanation is "higher mortgage interest rates are depressing prices but not the underlying demand."
Another possibility behind the housing slowdown is prices are "so expensive that everyone (well a lot of everyone) is leaving," the economist added.
Newsom, who assumed the governorship in January, this week announced an updated plan to ease the state's "housing cost crisis." The Democrat proposed a $1.75 billion housing package, including $1 billion in loans and tax incentives to spur low-, mixed- and middle-income housing production.
The governor wants to build 3.5 million new housing units in the state by 2025, or an average of about 500,000 a year. But there were only about 120,000 new homes built in 2018.
Newsom is pressing cities and counties to meet those ambitious housing expansion targets. Some of the steps are controversial, such as threatening to take away transportation funds from cities that fail to meet targets.
https://www.cnbc.com/2019/03/13/california-housing-seen-cooling-further-going-into-2020-ucla-forecast.html
Anderson Forecast: http://newsroom.ucla.edu/releases/ucla-anderson-forecast-points-to-weaker-economic-growth
It's still not getting any better from these reports either
Someone took credit and ownership on the way up - they own it lock, stock and barrel on the way down as well, and it is going down.
50
GNL
2019 Mar 13, 8:22pm
GNL
2019 Mar 13, 8:22pm
Kakistocracy says
Did I read this wrong? It says less housing will be built. How does that help anything other than higher prices?
California housing seen cooling further going into 2020: UCLA forecast
•While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, says the latest UCLA Anderson Forecast.
•The housing slowdown could put a damper on Democratic Gov. Gavin Newsom's plans to step up the pace of new homes built to help ease the state's housing shortage.
•The director of the forecast says home prices are falling in many major markets of the Golden State, calling the decline "widespread and substantial."
While job growth and the California economy remain strong, weakness is apparent in the state's housing market and it is likely to cool further going into 2020, according to the latest UCLA Anderson Forecast, released Wednesday.
"The housing markets are softening in California, and it's not just the tony neighborhoods of San Francisco, Silicon Valley and West LA," said Jerry ...
Did I read this wrong? It says less housing will be built. How does that help anything other than higher prices?
51
AD
2019 Mar 13, 9:34pm
AD
2019 Mar 13, 9:34pm
Zillow now shows San Francisco, Los Angeles and San Diego all as neutral markets (i.e., neither buy or sellers market).
52
krc
2019 Mar 13, 9:46pm
As IWOG would say - get ready to buy. I think a lot of his argument was that - yes - there will be fluctuations in the pricing of US real estate. But, when you look at the global market, the US is undervalued and has been so for decades. That will continue. Just to give some perspective here:
https://moneyinc.com/the-20-most-expensive-cities-to-buy-a-home-in-the-world/
And, yes, foreigners buying real estate does have an impact to pricing. And, yes, they may stop for a while, but when you look for asset purchase deals - the US still a bargain.
I do miss IWOG. I think his point on the real estate bears on this board would be "a broke clock is right twice a day." Of course there will be a pull back. :)
https://moneyinc.com/the-20-most-expensive-cities-to-buy-a-home-in-the-world/
And, yes, foreigners buying real estate does have an impact to pricing. And, yes, they may stop for a while, but when you look for asset purchase deals - the US still a bargain.
I do miss IWOG. I think his point on the real estate bears on this board would be "a broke clock is right twice a day." Of course there will be a pull back. :)
54
anonymous
2019 Mar 20, 5:08am
March 2019 Housing Market Reports
Orange County, March 2019
Irvine, California, March 2019
Los Angeles County, March 2019
San Diego County, March 2019
San Jose Metro, March 2019
San Francisco Metro, March 2019
Riverside County, March 2019
San Bernardino, March 2019
Ventura County, March 2019
You can access a link to each specific report here: http://ochousingnews.com/march-2019-housing-market-reports/
Orange County, March 2019
Irvine, California, March 2019
Los Angeles County, March 2019
San Diego County, March 2019
San Jose Metro, March 2019
San Francisco Metro, March 2019
Riverside County, March 2019
San Bernardino, March 2019
Ventura County, March 2019
You can access a link to each specific report here: http://ochousingnews.com/march-2019-housing-market-reports/
55
RC2006
2019 Mar 20, 11:41am
RC2006
2019 Mar 20, 11:41am
Wish you could see valuations over google maps, to see price changes on more local level. Are declines more in shitty areas?
56
AD
2019 Mar 20, 11:55am
AD
2019 Mar 20, 11:55am
RC2006 says
I think the best you could do is type in zip code at https://www.zillow.com/los-angeles-ca/home-values/
Also check Zillow Research such as https://www.zillow.com/research/local-market-reports/
https://www.zillow.com/research/data/
Wish you could see valuations over google maps, to see price changes on more local level. Are declines more in shitty areas?
I think the best you could do is type in zip code at https://www.zillow.com/los-angeles-ca/home-values/
Also check Zillow Research such as https://www.zillow.com/research/local-market-reports/
https://www.zillow.com/research/data/
57
AD
2019 Mar 20, 12:06pm
AD
2019 Mar 20, 12:06pm
RC2006 says
Please define "shitty areas" in terms of demographics, test scores at local public schools, amount of people living under one household roof, etc.
Are declines more in shitty areas?
Please define "shitty areas" in terms of demographics, test scores at local public schools, amount of people living under one household roof, etc.
58
anonymous
2019 Mar 31, 4:49am
This week ATTOM Data Solutions released its Q1 2019 U.S. Home Affordability Index, which shows that median-priced homes were not affordable for average wage earners in the first quarter of 2019 in 71 percent of the U.S. housing markets.
Of the 473 U.S. counties included in the analysis, 335 (71 percent) were not affordable for average wage earners. Among those, was Orange County, California, where the annual income needed to buy was $184,022 which was well above the $62,478 average annual wage there. In Orange County, an average wage earner would need to spend 82.5 percent of his or her income to buy a median-priced home in the first quarter of 2019.
Here are the top 10 counties where the greatest percent of annualized wages was needed to buy a home in Q1 2019:
https://www.attomdata.com/news/market-trends/figuresfriday/top-10-counties-with-the-worst-home-affordability/
Of the 473 U.S. counties included in the analysis, 335 (71 percent) were not affordable for average wage earners. Among those, was Orange County, California, where the annual income needed to buy was $184,022 which was well above the $62,478 average annual wage there. In Orange County, an average wage earner would need to spend 82.5 percent of his or her income to buy a median-priced home in the first quarter of 2019.
Here are the top 10 counties where the greatest percent of annualized wages was needed to buy a home in Q1 2019:
https://www.attomdata.com/news/market-trends/figuresfriday/top-10-counties-with-the-worst-home-affordability/
« First « Previous Comments 49 - 58 of 58 Search these comments
From November to December, sales of new and existing houses and condominiums in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties dropped 8.2 percent.
Sales usually rise in Southern California between November and December, with an average increase of around 12 percent, so this was clearly a huge aberration.
•The housing pain persists in Southern California, as higher costs weigh heavily on potential buyers. Home sales in the region fell 20.3 percent year over year in December, according to CoreLogic. That is the lowest December sales pace since 2007.
•From November to December, sales of new and existing houses and condominiums in the area dropped 8.2 percent in December.
•Sales usually rise in Southern California between November and December, with average increase of around 12 percent, so this was clearly a huge aberration.
"Last month's sharp drop in home sales stands out in several ways," said Andrew LePage, a CoreLogic analyst, noting that it was the slowest pace in 11 years and the largest decline for any month in more than eight years. "This drop in activity reflects a variety of factors. Mortgage rates hit a 2018 high in November, affecting December closings, and stock-market volatility created an additional headwind in high-end markets. Meanwhile, some would-be buyers remain priced out or unwilling to buy amid concerns that prices have overshot a sustainable level."
Sales of newly built homes fared particularly badly, down more than 50 percent from their average over the last 30 years. Much of that is because builders are still building far fewer homes since the housing crash, and part is because prices for newly built homes continue to soar.
"Half of America can only afford a $230,000 mortgage, and the builders in good locations just can't get down to anywhere near that," said John Burns, CEO of California-based John Burns Real Estate Consulting. "Eleven of the top 19 builders, their average sales price is above 400 grand."
More: https://www.cnbc.com/2019/01/30/southern-california-home-sales-plunge-20percent-in-december-lowest-pace-in-11-years.html
If you go back and look what happened not so long ago, it is interesting to see the same type of headlines.
Type in SoCal Housing in the search tab on here.
#SoCal #Housing