Posts from October 2022
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26
Study ranks the California housing markets that are cooling the most
California continues to have one of the most desirable and competitive housing markets in the nation, but a new study suggests that the hot housing market might be cooling in some cities.
SmartAsset, an online hub for consumer finance information, analyzed the top 100 housing markets in the U.S. and found that some California metropolitan areas are cooling off significantly faster than other cities.
Three California metro areas were in the study's top 10 for cooling markets.
The San Jose/Santa Clara metro area came in at fourth on the list — the highest of all California cities. Smartasset points to a high number of price reductions on homes as well as lower demand.
"Houses are on the market for roughly 19 days (eighth-highest), which is a 90% increase since exactly one-year ago (18th-highest). There has also been a 43.17% decrease in the number of houses sold and 26.81% of current listings have a price cut," according to the study.
Coming in at No. 8, and the second California metro area on the list, is San Diego.
"America's Finest City" saw a 35% decline in houses sold compared to one year ago, and houses that do go up for sale are staying on the market for twice as long in some situations.
Rounding out the top 10 is Stockton. The county seat of San Joaquin County is seeing similar issues as the other cities on the list; homes are staying on the market longer than in the previous year and homeowners are having to slash prices to get their properties sold. More than one-third of all homes on the market over the last year have had a price cut, the study found.
But no city is experiencing the effects of a stagnant housing market worse than Boise, Idaho.
Once a hotspot for people wanting to leave the big city life behind during the pandemic, the housing market in Idaho's capital is icy — to say the least.
"Boise has the sixth-lowest ratio of number of sold houses to new listings (0.49), meaning that almost twice as many houses are being listed relative to ones that are sold," according to SmartAsset. The study also found that homes were staying on the market 186% longer than in the previous year.
Austin, Texas, another "getaway" city during the pandemic, came in at No. 2 and Phoenix, Arizona landed at No. 3.
As for Angelenos, the housing market is still chugging along but it is showing some signs of slowing.
The Los Angeles/Long Beach/Anaheim metro area came in 24th on the list, mainly due to decreased demand.
Other California regions made the list as well. The Inland Empire landed at No. 17, San Francisco at No. 25, Fresno at No. 37 and Bakersfield came in at No. 42, respectively.
For a complete list of which housing markets are cooling, and to read more about the study's methodology, click here.
With mortgage rates hitting new highs, many people are shying away from dipping their toes into the market, but SmartAsset suggests now might be as good a time as any to buy a home before things start heating up once again.
26
California REALTORS® applaud bill to raise capital gains exclusion and free up housing inventory
California REALTORS® applaud bill to raise capital gains exclusion and free up housing inventory
LOS ANGELES (Sept. 29) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today issued the following statement in response to the "More Homes on the Market Act," introduced today by House Representatives Jimmy Panetta (D-CA) and Mike Kelly (R-PA). The bipartisan bill increases the capital gain exclusion amounts on the sale of a principal residence to $500,000 for single filers and $1 million for joint filers and indexes the exclusion for inflation.
"California REALTORS® thank Congressman Panetta for introducing the 'More Homes on the Market Act,' which will provide the necessary tax relief for California homeowners, particularly senior citizens, who have been unable to move because of the onerous tax burden that could result if they were to sell," said C.A.R. President...
18
C.A.R. releases its 2023 California Housing Market Forecast
October 12, 2022
C.A.R. releases its 2023 California Housing Market Forecast
Market shift under way as mild recession and higher interest rates cut into housing demand.
- Existing, single-family home sales are forecast to total 333,450 units in 2023, a decline of 7.2 percent from 2022's projected pace of 359,220.
- California's median home price is forecast to decline 8.8 percent to $758,600 in 2023, following a projected 5.7 percent increase to $831,460 in 2022.
- Housing affordability* is expected to drop to 18 percent next year from a projected 19 percent in 2022.
LOS ANGELES (Oct. 12) – A modest recession caused by an ongoing battle against inflation will keep interest rates elevated to suppress buyer demand and contribute to a weaker housing market in 2023, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
The baseline scenario of C.A.R.'s "2023 California Housing Market Forecast" sees a decline in existing single-family home sales of 7.2 percent next year to reach 333,450 units, down from the projected 2022 sales figure of 359,220. The 2022 figure is 19.2 percent lower compared with the pace of 444,520 homes sold in 2021.
The California median home price is forecast to retreat 8.8 percent to $758,600 in 2023, following a projected 5.7 percent increase to $831,460 in 2022 from $786,700 in 2021. A less competitive housing market for homebuyers and a normalization in the mix of home sales will curb median price growth next year.
"With the market shifting as home sales and prices are predicted to temper next year, buyers and sellers are adapting to the new realities of the market," said C.A.R. President Otto Catrina, a Bay Area real estate broker and REALTOR®. "As sellers adjust their expectations, well-priced homes are still selling quickly. And for buyers: more homes for sale, less competition, and fewer homes selling above asking price, all point to a more favorable market environment for those who were outbid or sat out during the past two years when the market was fiercely competitive."
C.A.R.'s 2023 forecast projects a dip in the U.S. gross domestic product of 0.5 percent in 2023, after a projected uptick of 0.9 percent in 2022. With California's 2023 nonfarm job growth rate at 1.0 percent, up from a projected increase of 4.9 percent in 2022, the state's unemployment rate will edge up to 4.7 percent in 2023 from 2022's projected rate of 4.4 percent.
Stubbornly high inflation and growing economic concerns will keep the average for 30-year, fixed mortgage interest rates elevated at 6.6 percent in 2023, up from 5.2 percent in 2022 and from 3.0 percent in 2021 but will remain relatively low by historical standards.
"As the housing market continues to cool, the U.S. economy will moderate further and is expected to slip into a mild recession in the first half of next year," said C.A.R. Vice President and Chief Economist Jordan Levine. "High inflationary pressures will keep mortgage rates elevated, which will reduce buying power and depress housing affordability for prospective buyers in the upcoming year. As such, housing demand and home prices will soften throughout 2023," Levine continued.
2023 CALIFORNIA HOUSING FORECAST
|
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022p |
2023f |
|
|
SFH Resales (000s) |
417.7 |
424.9 |
402.6 |
398 |
411.9 |
444.5 |
359.2 |
333.4 |
|
% Change |
2.0% |
1.7% |
-5.2% |
-1.2% |
3.5% |
7.9% |
-19.2% |
-7.2% |
|
Median Price ($000s) |
$502.3 |
$537.9 |
$569.5 |
$592.4 |
$659.4 |
$786.7 |
$831.5 |
$758.6 |
|
% Change |
5.4% |
7.1% |
5.9% |
4.0% |
11.3% |
19.3% |
5.7% |
-8.8% |
|
Housing Affordability Index* |
31% |
29% |
28% |
31% |
32% |
26% |
19% |
18% |
|
30-Yr FRM |
3.6% |
4.0% |
4.5% |
3.9% |
3.1% |
3.0% |
5.2% |
6.6% |
p = projected
f = forecast
* = % of households who can afford median-priced home
Leading the way ...® in real estate news and information for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 217,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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ARTICLE BELONS TO CAR.ORG