Southern California home sales have plummeted falling to the lowest reading in four years. Sales of both new and existing houses and condominiums dropped by 11.8 percent year over year as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange Counties.
“Home Sales Are Plunging back to the levels experienced during the 2008 Crisis”
weakness was especially apparent in sales of newly built homes, which were 47
percent below the June average. Part of that is that builders are putting up
fewer homes, so there is simply less to sell.
For years, the California housing market was on the cutting edge of “Housing Bubble 2” as we watched as home prices in the state soar to absurd levels.
But now, the trend has flipped. The hottest real estate markets in the entire country led the way down during the collapse of “Housing Bubble 1”, and it would appear the same thing is likely to be true for this coming year.
According to CNBC, the number of new and existing homes sold in
southern California was down 18 percent in October compared to a year ago…
The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with October 2017, according to CoreLogic. That was the slowest October pace since 2007, when the national housing and mortgage crisis was hitting.
Sales have been falling on an annual basis for much of thisyear, but this was the biggest annual drop for any month in almost eight years. It was also more than twice theannual drop seen in August.
What goes up must eventually come down…
The numbers are staggering. And it is interesting to note that sales of new homes have been hit the hardest.
Sales of newly built homes are suffering more than sales of
existing homes, likely because fewer are being built compared with historical
production levels. Newly built homes also come at a price premium. Sales of
newly built homes were 47 percent below the September average dating back to
1988, while sales of existing homes were 22 percent below their long-term
San Diego County was once considered
one of the hottest hot real estate markets in the nation, but since the market conditions
have drastically changed.
In fact, the county just
registered the fewest number of home sales in a month since the last financial crisis…
A combination of rapid mortgage
rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last
month, in the first meaningful sign that one of the country’s hottest real
estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.
In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.
Housing trends are plunging even more rapidly in Orange County. Steven Thomas, Quantitative Economics and Decision Sciences recently shared the latest reports on housing…
In the Orange County area, the expected time for homes to sell increased from 105 to 110 days. It was at 65 days this time last year. The expected market time is predicted to continue to rise rapidly. Last year, there were 2,393 pending home sales, 18% more than today. The housing market is no longer instantaneous. When supply increases and demand drops at the same exact time, the market rapidly slows; and, that is precisely what occurred in Orange County from May through October of 2018.
If a new real estate crisis is already happening, these are precisely
the kinds of numbers that we would expect to see. If you require further evidence,
here are even more distressing numbers from the California real estate
market that Mish Shedlock recently shared…
- The California housing market posted its largest year-over-year
sales decline since March 2014 and remained below the 400,000-level sales
benchmark for the second consecutive month in September, indicating that the
market is slowing as many potential buyers put their homeownership plans on
- Existing, single-family home sales totaled 382,550 in September
on a seasonally adjusted annualized rate, down 4.3 percent from August and down
12.4 percent from September 2017.
- September’s statewide median home price was $578,850, down 2.9
percent from August but up 4.2 percent from September 2017.
- Statewide active listings rose for the sixth consecutive month,
increasing 20.4 percent from the previous year.
- Inventory reached the highest level in 31 months, with the
Unsold Inventory Index reaching 4.2 months in September.
- September year-to-date sales were down 3.3 percent.
The California trend is occurring
across the nation. Similar conditions
are also felt on the east coast. The housing market has slowed
substantially in New York City and is now being called “a buyer’s market”…
New York City’s pricey real estate has become
a “buyers market,” new data suggests, characterized by lowball offers and a
rise in the number of properties staying on the market for longer.
The latest figures from Warburg
Realty show that among higher-priced homes, New York City is in
the throes of a “major shift” that reflects a cooling market, the likes of
which hasn’t been seen in almost a decade.
“Offers 20 percent and 25 percent below asking prices began toflow in, a phenomenon last seen in 2009,” wrote Warburg Realty founder and CEOFrederick W. Peters in the report, which surveys real estate conditions around the city.