Monday, October 22, 2018

California: "California Housing Market Experiencing Shift as Home Sales Continue Descent in September"

by Bill McBride on 10/22/2018 05:49:00 PM

The CAR reported: California Housing Market Experiencing Shift as Home Sales Continue Descent in September

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 hold, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 382,550 units in September, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

September's sales figure was down 4.3 percent from the revised 399,600 level in August and down 12.4 percent compared with home sales in September 2017 of 436,920.

"The housing market continued to deteriorate and the decline in sales worsened as interest rates remained on an upward trend. More would-be buyers are self-sidelining as they believe home prices will start to come down soon, making housing more affordable despite rising interest rates," said C.A.R. President Steve White. "Tax reform, which increases the cost of homeownership, also is contributing to the decline, especially in high-cost areas such as the San Francisco Bay Area and Orange County."
...
Statewide active listings rose for the sixth consecutive month following 33 straight months of declines, increasing 20.4 percent from the previous year. September's listings increase was the biggest in nearly four years.
emphasis added
Here is some inventory data from the NAR and CAR (ht Tom Lawler).  Notice inventory is really increasing year-over-year in California.

YOY % Change, Existing SF Homes for Sale
  NAR
(National)
CAR
(California)
Sep-17-8.4%-11.2%
Oct-17-10.4%-11.5%
Nov-17-9.7%-11.5%
Dec-17-11.5%-12.0%
Jan-18-9.5%-6.6%
Feb-18-8.6%-1.3%
Mar-18-7.2%-1.0%
Apr-18-6.3%1.9%
May-18-5.18.3%
Jun-18-0.5%8.1%
Jul-180.0%11.9%
Aug-182.1%17.2%
Sep-181.1%20.4%