California Housing Market

Update – December 2018

January 22, 2019

Oscar Wei
Senior Economist
Overview

• Housing market conditions continue

to soften
• Sales down double-digits despite
recent decline in interest rates
• Price growth remains near lowest
level since early 2012
• Fundamentals are still solid
• Window of opportunities for buyers
Market Update
 Stock Market Volatility

(Jan 2018 – Jan 2019) (9/1/18 – 1/18/19)

28000 28000

27000 27000 26,828

26000 26000
24,706
25000 25000

24000 24000

23000 23000

22000 22000

21000 21,792
21000

20000 20000

SERIES: Dow 30
SOURCE: Yahoo Finance
 Mortgage Rates Surpassed 5% in Nov,
but Declined to Mid-2018 Level Lately

Jan 18: 4.60%

SERIES: Average 30 Yr. Fixed Mortgage Rates

SOURCE: Mortgage News Daily
 Fed Has Raised Rates 9x since Dec 2015
January 2012 – January 2018
6 MONTHLY WEEKLY
5 4.64 4.51

4 3.98
4.02

3 2.5 2.5
Fed Raise Rate
2 FRM the 1st time
since mid-2006
ARM
1 Fed Funds Rate

SERIES: 30Yr FRM, 5Yr ARM, Fed Funds Rate (Target Rate)
SOURCE: Freddie Mac, St. Louis Fed
 Housing Confidence Down

SERIES: Home Purchase Sentiment Index

SOURCE: Fannie Mae
 Primarily Due to the Decline in Attitude
towards Home Buying

SERIES: Home Purchase Sentiment Index

SOURCE: Fannie Mae
 Is It a Good Time to Buy or Sell?

Do you think it’s a good time to buy a Do you think it’s a good time to sell a
home in California? home in California?

57% 56%
51% 48%
46%

27% 25%
22% 21% 22%

Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19

Do you think it’s a good time to buy a home in California? (n=300) SERIES: 2018 Google Consumer Poll
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Do you think it’s a good time to sell a home in California? (n=300)
 Government Shutdown Impact on
Housing Market
Impact on Transactions
What Led to the Shutdown?
No Impact on Contract Signings or
As of midnight on December 21, 2018, Closings
75%

the President and Congress were unable

to come to an agreement regarding
provisions of a Continuing Resolution to Yes, Impact on Potential Clients 11%
fund the federal government. Due to
this, a partial federal government
shutdown has occurred. The shutdown Yes, Impact on Current Clients 11%
includes aspects of federal housing,
mortgage, and programs of the real
estate industry. Other 8%

SERIES: Impact on Transactions due to shutdown

SOURCE: National Association of REALTORS® Federal Government Shutdown Survey
 Impact Among Those Affected
How shutdown has impacted transactions? (Top 12)
Buyers decided not to buy due to economic uncertainty (not a… 25%

Closing delay due to USDA loan 17%

Closing delay due to IRS Income Verification 13%

Closing Delay due to FHA Loan 9%

Closing was delayed (not specified) 9%

Buyers decided not to buy: Lost income or furlough (They are Federal… 9%

Seller Decided not to sell: Employment was impacted and unable to… 6%

Closing delay due to VA loan 6%

Buyer lost a bid because they were using FHA loan 6%

Buyer lost a bid because they were using USDA loan 4%

Buyer lost a bid because they were using VA loan 3%

Buyer unable to buy: Lender rejection based on furlough (They are… 3%

SERIES: Impact on Transactions due to shutdown

SOURCE: National Association of REALTORS® Federal Government Shutdown Survey
 Sales Reached the Lowest Level since Jan 2015
California, December 2018 Sales: 372,260 Units, -5.2% YTD, -11.6% YTY
700,000

600,000
Dec-17: Dec-18:
420,960 372,260
500,000

400,000

300,000

200,000

100,000

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are seasonally adjusted and annualized
 California Home Sales Continued on a
Declining Trend
Year-over-Year % Chg 6 per. Mov. Avg. (Year-over-Year % Chg)
25%

20%

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are seasonally adjusted and annualized
 Bay Area Sales Had the Largest YOY Decline
since Oct 2010
Bay Area 6 per. Mov. Avg. (Bay Area)
30%

20%

10%
YoY % chg.

0%

-10%

-20% -17.5%

-30%

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are not seasonally adjusted and annualized
 Southern California Home Sales Continued
to Dip by Double-Digit
YoY % chg. So CA 6 per. Mov. Avg. (So CA)
40%

30%

20%

10%

0%

-10%

-20% -17.3%

-30%

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are not seasonally adjusted and annualized
 Central Valley Sales Dropped the Most in
Nearly Five Years
YoY % chg. Central Valley 6 per. Mov. Avg. (Central Valley)
30%

20%

10%

0%

-10%

-20% -15.7%

-30%

SERIES: Sales of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® *Sales are not seasonally adjusted and annualized
 Sales Declined in All Price Segments
December 2018 (YTY% Chg.) Share by Price Segment
0% 0% 5% 10% 15% 20% 25%

-5% $0 - $199k 5.9%

-10% $200 - $299k 15.6%

-11.7% $300 - $399k 16.3%

-15%
-15.6% $400 - $499k 14.1%
-15.6% -15.3% -16.7%
-20% -17.8% -18.2%
$500 - $749k 23.8%
-25%
$750 - $999k 10.2%

-30% -28.1% $1,000 - $1,999k 11.0%

$2,000k+ 3.2%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Bay Area
Sales of Existing Single-Family Homes YTY% Chg.
900

800 757 779 15% 11.3%

724
700 649 10%
606
600 575 5%

500 0%
400 346 -5%
319 335
282 279
300 254 -10%
200 157
141
135
118 101 -15%
79 -12.6%
100 -16.7%
-20% -16.7%
-18.5%
-19.9% -20.4% -20.6%
0
-25% -21.8%

Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Southern California
Sales of Existing Single-Family Homes YTY% Chg.
4,000
3,451 0%
3,500

3,000 2,888
-5%

2,500
-10%
2,000 1,875
1,720
1,544 1,467 -15%
1,500 -13.8%
1,266 1,219 -14.7%
1,034 -16.3%
938
1,000 -20% -18.3% -17.7%

500 363313
-25%
-23.1%
0
-30%

Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Central Coast
Sales of Existing Single-Family Homes YTY% Chg.
250
228
0%
213 210
200 -5%

174 179
167 -10%

147 -15%
150
-14.8%
-20%
114
-25%
100 -23.7%
-30%
-31.0%
-35% -31.7%
50
-40%

0
Monterey San Luis Obispo Santa Barbara Santa Cruz
Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Central Valley
Sales of Existing Single-Family Homes YTY% Chg.
1,600
1,391 140%
1,400
113.3%
120%
1,200
1,080 100%
1,000 80%
60%
800
634
604 40%
600 560
481 20% 11.9%
451
416 454 430
370 361 0%
400 298
238 -4.7%
179 -20%
200 122 -7.8% -14.1%-16.0%
9478 117 109 -17.0%
-18.5%-22.4% -20.1%
1532 5237 -40% -28.8%
0 -34.6%
-60%

Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Other Counties
Sales of Existing Single-Family Homes YTY% Chg.
350
310
295 120%
300 105.3%
100%
250 80%
196 60%
200
40.0%
151 40%
150
117 116 20%
0.0%
100 86 83 0%
7873
-6.4% -2.2%
4544 -20%
50
1912 2323 -40% -26.5%
1014 74 -28.4%
-36.8% -33.6% -42.9%
0 -60%

Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Other Counties
Sales of Existing Single-Family Homes YTY% Chg.
250 237
222
120%
100.0%
200 100%

80%
150
60%
121
100 40%
94 97 27.0%
100 17.4%
7781 74
80 81 20% 6.8% 5.2%
69
63
48 0%
50 37
3026 32 -6.0%
-20%
-13.3%
-19.8%
-40%
0 -33.3%

Dec-17 Dec-18

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 California Sales Remain Significantly
below the Peak
California Existing Single-Family Home Sales
600,000 576,240

500,000

402,750
400,000

300,000

200,000

100,000

1995

2011
1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1997

1999

2001

2003

2005

2007

2009

2013

2015

2017
SERIES: CA Existing Single-Family Home Sales (Annual)
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Bay Area

County 2017 2018 YTY% Chg.

Alameda 9,784 9,731 -0.5%
Contra Costa 10,683 10,264 -3.9%
Marin 2,078 2,047 -1.5%
Napa 1,183 1,142 -3.5%
San Francisco 2,182 2,158 -1.1%
San Mateo 4,174 4,068 -2.5%
Santa Clara 10,481 9,665 -7.8%
Solano 4,557 4,191 -8.0%
Sonoma 4,371 4,109 -6.0%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Southern California

County 2017 2018 YTY% Chg.

Los Angeles 42,128 38,538 -8.5%
Orange 18,226 16,625 -8.8%
Riverside 24,781 23,007 -7.2%
San Bernardino 15,291 14,574 -4.7%
San Diego 23,627 21,696 -8.2%
Ventura 5,269 4,933 -6.4%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Central Coast

County 2017 2018 YTY% Chg.

Monterey 2,574 2,578 0.2%
San Luis Obispo 3,106 2,970 -4.4%
Santa Barbara 2,697 2,483 -7.9%
Santa Cruz 1,826 1,793 -1.8%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Central Valley
County 2017 2018 YTY% Chg.
Fresno 10,716 10,596 -1.1%
Glenn 219 218 -0.5%
Kern 5,760 5,887 2.2%
Kings 1,076 1,093 1.6%
Madera 2,102 1,605 -23.6%
Merced 1,444 1,563 8.2%
Placer 6,065 5,675 -6.4%
Sacramento 17,240 16,742 -2.9%
San Benito 562 558 -0.7%
San Joaquin 6,944 6,521 -6.1%
Stanislaus 5,619 5,248 -6.6%
Tulare 3,468 3,513 1.3%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Other Counties
County 2017 2018 YTY% Chg.
Butte 1,903 2,043 7.4%
Calaveras 1,190 1,204 1.2%
Del Norte 229 247 7.9%
El Dorado 3,454 3,294 -4.6%
Humboldt 1,244 1,296 4.2%
Lake 941 842 -10.5%
Lassen 262 283 8.0%
Mariposa 152 144 -5.3%
Mendocino 582 581 -0.2%
Mono 145 122 -15.9%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales of Existing Single-Family Homes –
Other Counties

County 2017 2018 YTY% Chg.

Nevada 1,376 1,378 0.1%
Plumas 407 348 -14.5%
Shasta 2,920 3,026 3.6%
Siskiyou 499 519 4.0%
Sutter 903 928 2.8%
Tehama 448 474 5.8%
Tuolumne 884 890 0.7%
Yolo 1,746 1,517 -13.1%
Yuba 948 952 0.4%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Home Prices Continued to Grow but at a Very
Modest Pace
California, December 2018: $557,600, +0.5% MTM, +1.5% YTY
Dec-18:
P:May-07
$700,000 $557,600
$594,530 Dec-17:
$549,550
$600,000

$500,000
T: Feb-09
$245,230
$400,000 -59% from
peak
$300,000

$200,000

$100,000

$-

SERIES: Median Price of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Condo/Townhome Median Price Leveling off
as Markets Move into Off Season
$600,000 Condo

$500,000

$400,000
Median Price

Dec-18:
Dec-17:
$460,660
$300,000 $446,840

$200,000

$100,000

$0
Jan-05

Jan-10

Jan-15
Jun-05

Jun-10

Jun-15
Jul-07

Jul-12

Jul-17
Dec-07

Dec-12

Dec-17
May-08

May-13

May-18
Oct-08

Oct-13

Oct-18
Nov-05

Sep-06

Nov-10

Sep-11

Nov-15

Sep-16
Apr-06

Mar-09
Aug-09

Apr-11

Mar-14
Aug-14

Apr-16
Feb-07

Feb-12

Feb-17
SERIES: Median Price of Existing Condos/Townhomes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Price Growth Remained near Lowest Level
since Early 2012
50% Condo Single-Family Homes
40%
30%
20%
YTY% Chg. in Price

10%
0%
-10%
-20%
-30%
-40%
-50%

SERIES: Median Price of Existing Condo/Townhomes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Price Per Square Inched Up from Last Year,
but Declined from November
December 2018: $268, Down 5.0% MTM, Up 1.1% YTY
$400
Dec-18:
$350 Dec-17: $268
$266
$300
PRICE PER SQ. FT.

$250

$200

$150

$100

$50

$0

SERIES: Median Price Per Square Feet of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Year-over-Year Price Growth by Percentile
California Year-Over-Year Price Growth by Quintile (December 2018)
3.0% 2.7%

2.0% 1.7%
1.5%

1.0%
0.0%
0.0%

-0.4%
-1.0%

-2.0% -1.8%
-2.0%
-3.0% -2.6%

-4.0%
-3.8%

-5.0%
0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100
Quintile

SERIES: Median Price of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 List Price Suggests a Bounce Back in Sales
Price Growth
California Median Sales vs. List Price Growth
Sales Price Growth Lags List Price Growth by 4-6 Months
40%

30%
YTY% Chg. in Price

20%

10%

0%

-10%

-20%
Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18
Oct-12
Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18
Oct-13

Oct-14

Oct-15

Oct-16

Oct-17

Oct-18
Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18
Listing Price Sales Price
SERIES: Sales to List Ratio of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Reduced-Price Listings
Share of Listings with a Reduced Price: 38.3%; Median Reduction Amount: -4.3%
California Reduced-Price Listings
50% 10%
38.3%
45% 9%
40% 8%
35% 7%
30% 6%
25% 5%
20% 4%
15% 3%
4.3%
10% 2%
5% 1%
0% 0%
10/1/2010

10/1/2011

10/1/2012

10/1/2013

10/1/2014

10/1/2015

10/1/2016

10/1/2017

10/1/2018
1/1/2010
4/1/2010
7/1/2010

1/1/2011
4/1/2011
7/1/2011

1/1/2012
4/1/2012
7/1/2012

1/1/2013
4/1/2013
7/1/2013

1/1/2014
4/1/2014
7/1/2014

1/1/2015
4/1/2015
7/1/2015

1/1/2016
4/1/2016
7/1/2016

1/1/2017
4/1/2017
7/1/2017

1/1/2018
4/1/2018
7/1/2018
Share Reduced Median Reduction
SERIES: Listing Price of Existing Single Family Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Sales Price -to-List Price Hit the Lowest
Level since Jan 2015
December 2018: 97.4%, -0.5% MTM, -1.3% YTY
Dec-17:
Dec-18:
98.7%
97.4%
100%

98%
Sales-to-List Price Ratio

96%

94%

92%

90%

SERIES: Sales to List Ratio of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Bay Area

County Dec-17 Dec-18 YTY% Chg.

Alameda $862,000 $850,000 -1.4%
Contra Costa $600,000 $612,500 2.1%
Marin $1,268,900 $1,270,500 0.1%
Napa $688,000 $725,000 5.4%
San Francisco $1,475,000 $1,500,000 1.7%
San Mateo $1,500,000 $1,483,000 -1.1%
Santa Clara $1,300,000 $1,150,000 -11.5%
Solano $416,000 $425,000 2.2%
Sonoma $670,000 $639,000 -4.6%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Southern California

County Dec-17 Dec-18 YTY% Chg.

Los Angeles $577,690 $588,140 1.8%
Orange $785,500 $785,000 -0.1%
Riverside $385,000 $398,000 3.4%
San Bernardino $278,000 $295,000 6.1%
San Diego $605,000 $618,500 2.2%
Ventura $645,000 $640,000 -0.8%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Central Coast

Region Dec-17 Dec-18 YTY% Chg.

Monterey $614,000 $590,000 -3.9%
San Luis Obispo $590,000 $640,000 8.5%
Santa Barbara $730,000 $806,030 10.4%
Santa Cruz $831,000 $926,000 11.4%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Central Valley
Region Dec-17 Dec-18 YTY% Chg.
Fresno $259,750 $266,500 2.6%
Glenn $230,000 $246,500 7.2%
Kern $233,000 $242,380 4.0%
Kings $225,000 $243,000 8.0%
Madera $239,000 $263,000 10.0%
Merced $239,900 $269,061 12.2%
Placer $451,500 $492,993 9.2%
Sacramento $350,000 $364,500 4.1%
San Benito $537,000 $577,000 7.4%
San Joaquin $349,725 $365,000 4.4%
Stanislaus $300,000 $309,000 3.0%
Tulare $219,500 $236,450 7.7%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Other Counties
Region Dec-17 Dec-18 YTY% Chg.
Butte $304,000 $356,558 17.3%
Calaveras $285,000 $310,000 8.8%
Del Norte $251,500 $243,900 -3.0%
El Dorado $450,000 $454,500 1.0%
Humboldt $319,500 $308,000 -3.6%
Lake $269,500 $269,000 -0.2%
Lassen $175,000 $208,000 18.9%
Mariposa $310,000 $320,000 3.2%
Mendocino $409,500 $424,900 3.8%
Mono $515,000 $541,000 5.0%
SERIES: Sales of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Median Price of Existing Single-Family Homes –
Other Counties

Region Dec-17 Dec-18 YTY% Chg.

Nevada $393,500 $389,950 -0.9%
Plumas $256,000 $262,950 2.7%
Shasta $258,250 $267,500 3.6%
Siskiyou $192,500 $182,500 -5.2%
Sutter $270,000 $320,000 18.5%
Tehama $190,000 $255,000 34.2%
Tuolumne $269,900 $258,950 -4.1%
Yolo $420,000 $429,000 2.1%
Yuba $241,000 $298,000 23.7%

SERIES: Sales of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Inventory Index Down MTM but Up from 2017
December 2017: 2.5 Months; December 2018: 3.5 Months
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

Note: “Unsold Inventory Index” represents the number of months it would take to sell the remaining inventory for the month in question. The remaining inventory for the month is defined
as the number of properties that were “Active”, “Pending”, and “Contingent” (when available) and divide the sum by the number of “Sold” properties for the month in question.

SERIES: Unsold Inventory Index of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Active Listings Continued to Increase for the
9th Consecutive Month
Year-over-Year % Chg
35% 30.6%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%

SERIES: Active Listing of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Housing Supply Improved across the Board
Dec 2018
Active Listing
60%
49.1%
50%
39.9%
40% 37.7%
30.6%
30% 26.3%
20.4%
20%

10% 6.8%
1.9%
0%

SERIES: Active Listings of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Active Listings Increased in All Regions

Dec-17 Dec-18
30,000
26,610
25,000

19,900
20,000
Active Listings

15,000

9,591
10,000
7,755

4,441
5,000
2,699 1,870 2,096

0
San Francisco Bay Area Southern California Central Valley Central Coast

SERIES: Active Listings of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Active Listings Increased in All Regions
Dec 2018

Sales Active Listings

70% 65%
60%
50%
Year-to-Year % Chg

40% 34%
30% 24%
20%
12%
10%
0%
-10%
-20% -18% -16%
-17%
-30% -25%
San Francisco Bay Southern California Central Valley Central Coast
Area

SERIES: Sales and Listings of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Time on Market Rises as the Market Slows
California, December 2018: 32.0 Days
80

70

60
DAYS ON MARKET

50

40

30

20

10

SERIES: Median Time of Market of Existing Single Family Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Outlook
Economic Fundamentals Remain Strong

3.4% 3.5% 2.2%

GDP 2018-Q3 Consumption Core CPI

2018-Q3 December 2018

3.9% 1.8%

Unemployment Job Growth

December 2018 December 2018
 Mortgage Rates Surpassed 5% in Nov,
but Declined to Mid-2018 Level Lately

Jan 18: 4.60%

SERIES: Average 30 Yr. Fixed Mortgage Rates

SOURCE: Mortgage News Daily
 Rates Rising, but Keep Perspective!
30-Year Fixed Rate Mortgage
20 18.28
18
16
14
12
10
8 6.59
6
4
2
0

SERIES: 30Yr FRM, 5Yr ARM

SOURCE: Freddie Mac
 U.S. Economic Outlook

2013 2014 2015 2016 2017 2018p 2019f

US GDP 1.7% 2.4% 2.6% 1.6% 2.3% 3.0% 2.4%

Nonfarm Job Growth 1.7% 1.9% 2.1% 1.8% 1.4% 1.6% 1.3%

Unemployment 7.4% 6.2% 5.3% 4.9% 4.4% 3.9% 3.7%

CPI 1.5% 1.6% 0.1% 1.4% 2.0% 2.5% 2.4%

Real Disposable Income, % Change -1.4% 2.7% 3.4% 2.7% 2.1% 2.8% 2.6%

30-Yr FRM 4.0% 4.2% 3.9% 3.6% 4.0% 4.7% 5.2%

SERIES: U.S. Economic Outlook

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 California Economic Outlook

2013 2014 2015 2016 2017 2018p 2019f

Nonfarm Job Growth 3.0% 2.2% 2.7% 2.3% 1.6% 2.0% 1.4%

Unemployment 8.9% 7.5% 6.2% 5.5% 4.8% 4.3% 4.3%

CA Population (Million) 38.4 38.7 39.1 39.4 39.6 39.9 40.2

Population Growth 0.9% 1.0% 0.8% 0.6% 0.8% 0.7% 0.7%

Real Disposable Income, % Change -2.1% 5.6% 3.9% 1.6% 1.6% 2.4% 3.0%

SERIES: CA Economic Outlook

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 California Housing Market Outlook

2013 2014 2015 2016 2017 2018p 2019f

SFH Resales (000s) 414.9 382.7 409.4 417.7 424.9 402.8 375.1

% Change -5.9% -7.8% 7.0% 2.0% 1.7% -5.2% -6.9%

Median Price ($000s) $407.2 $446.9 $476.3 $502.3 $537.9 $570.0 $568.8

% Change 27.5% 9.8% 6.6% 5.4% 7.1% 6.0% -0.2%

Housing Affordability
36% 30% 31% 31% 29% 28% 26%
Index

30-Yr FRM 4.0% 4.2% 3.9% 3.6% 4.0% 4.7% 5.2%

SERIES: CA Housing Market Outlook

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
 Key Takeaways
• Sales continue to pull back as buyers remain on the sideline.

• Prices will be flat in 2019.

• Shutdown impact is limited for now, but will get worse if

prolonged

• Economic and market uncertainties led to lower interest rates in

the past few weeks, but rates are expected to climb back up.

• Many still want to buy and now is the window of opportunity

before rates climb further.
Where is the Market Data?
Housing Matters Podcast
 Thank You

This presentation can be found on

www.car.org/marketdata
Speeches & Presentations
oscarw@car.org