Wednesday, October 16, 2019

CAR on California Housing: Low Rates "Bolster" Sales in September

by Calculated Risk on 10/16/2019 12:54:00 PM

The CAR reported: Greater buying power amid historically low rates bolsters September home sales, C.A.R. reports

Amid the most favorable mortgage interest rates in nearly three years, California’s housing market recorded a third consecutive year-over-year sales increase as month-over-month sales remained essentially flat, 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 404,030 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 2019 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 0.5 percent from the 406,100 level in August and up 5.8 percent from home sales in September 2018 of a revised 382,040. The year-over-year sales increase was the largest in two-and-a-half years.

“The housing market has been performing better so far in the second half of 2019, with both sales and prices up as mortgage rates remain near their three-year lows,” said C.A.R. President Jared Martin. “Additionally, pending sales have been on an upward trend with a near-10 percent increase over a year ago, making it the largest gain in three years. The solid improvement in pending sales suggests that the market may see more sales gains in the coming months.”
...
After 15 straight months of year-over-year increases, active listing fell for the third straight month, dropping 11.8 percent from year ago. The decline was the largest since December 2017.

The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was 3.5 months in September, up from 3.2 in August and down from 4.2 months in September 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
emphasis added
Here is some inventory data from the NAR and CAR (ht Tom Lawler).   Note that this is the third consecutive YoY decrease in inventory in California since early 2018.

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%
Oct-182.8%28%
Nov-184.2%31%
Dec-184.8%30.6%
Jan-194.6%27%
Feb-193.2%19.2%
Mar-191.8%13.4%
Apr-191.7%10.8%
May-192.1%7.4%
Jun-19-0.05%2.4%
Jul-19-1.0-2.1%
Aug-19-2.6-8.9%
Sep-19NA-11.8%