I’ll try to keep this short as I’m currently out of the office and the month was steady, if unexceptional. It could have been worse. After last months unanticipated drop in sales volume there was concern that August might follow last year’s pattern and drop even further. It didn’t. In fact sales were up slightly month over month and up a whopping 17% over last August.
In fact the year is shaping up to be one of our best in a while, if buyers don’t back off the throttle before year-end. With a little more inventory and rock bottom interest rates, there might even be a few more buyers in the market as they see opportunities disappearing. Year-to-date, regional sales are up 3% from last year (7,739 / 7,480) and up 13% over 2014 (7,739 / 9,764). What’s also nice is that prices have also tracked positive over the past couple years, up 7% over last year ($323,252 / $300,188) and up a comfortable 11% over 2014 ($323,252 / $286,083).
Housing in our region isn’t setting any records but it is charting a nice, consistent, advance. Median prices were up in every city in Southwest California by an average of 5% – 9%. Last year, August sales dropped 20% from July but this year did not repeat. Sales were actually up about 3% month-over-month (1,095/ 1,067). Inventory increased by 2% to 2,478 properties listed for sale but pending sales were down 13%. September could be shaky. Homes are staying on the market 59 days instead of 54, months inventory is 2.6. instead of 2.4. Exciting stuff. Well, at least positive stuff. Our market may not be exciting but it appears to be stable and growing. Some areas of our state that had more explosive price appreciation have hit a ceiling and are dropping. Granted they may only be dropping from a $1.8 million median price to $1.4, but that’s still real money to some folks.
Obviously the election is impacting the market in ways both good and bad – it’s bringing some buyers out of the woodwork as they see prices continuing to escalate and the security of a home is a hedge against the coming storms.
Of course it’s also keeping some away from the market. That’s the consumer confidence factor and it’s not great right now either. There is great supposition that after the election, when we’re at least fairly sure of the country’s direction for the next few years, the fabled ‘pent-up demand’ will come roaring into the market coupled with the millenial stampede to housing as they age, and we’ll see a tsunami-like surge in demand. Well, who knows.
We’ve finished another session in Sacramento and await the Governor’s decision on nearly 900 bills, including several real estate sponsored bills that made it through the process. There’s not a lot to celebrate this session with numerous bills that increase costs or regulation on California businesses. Sacramento is not a business friendly place in spite of the best efforts of our own elected representatives and a few others. We’d like to thank Senators Jeff Stone, Mike Morrell and Richard Roth along with Assembly members Melissa Melendez, Marie Waldron, Brian Jones, Chad Mayes and Eric Linder. They represented our region in the face of insurmountable odds and made their presence known.
So, keep your fingers crossed that we produce another bumper crop of home sales in 2016, and that homeowners equity continues to strengthen. We’re not quite back but we’re getting close.