June is National Homeownership Month, a time to reflect upon the impact owning a home has on household wealth, neighborhood stability and the nation's broader economic health. The theme of National Homeownership Month 2017 is "Find Your Place in a New Era of Homeownership."
Today, U.S. Housing and Urban Development Secretary Ben Carson kicked off the month-long recognition by hosting an academic forum on the state of homeownership in the U.S. following the housing crisis, specifically the challenges millennials face as they enter the market in greater numbers.
"After all we've been through, homeownership remains an American value and the cornerstone of our economy," said Secretary Carson. "Today, we recognize the abiding value of owning a home, and rededicate ourselves toward ensuring that every hardworking and credit-worthy American enjoys a fair chance at becoming a homeowner."
Since its creation in 1934, the Federal Housing Administration (FHA) has helped more than 46 million Americans purchase or refinance their homes. Last year alone, FHA insured more than 1.2 million home loans, totaling $245 billion. An estimated 40 percent of all first-time homebuyers use FHA; 47 percent of home purchases by African American households are FHA-insured borrowers; and nearly half of Hispanic homebuyers rely upon an FHA-insured mortgage to purchase their homes.
May 24, 2017
California pending home sales lose steam for fourth straight month in April
LOS ANGELES (May 24) – Consistent with the slowdown in April's closed escrow sales, which declined from the previous month and year, low housing inventory and eroding affordability suppressed pending home sales for the fourth straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
C.A.R.'s April Market Pulse Survey** saw mixed results as REALTORS® reported an increase in floor calls for the fourth straight month, but less open house traffic, and no change in listing appointment activity compared with the previous month.
Pending home sales data:
• Based on signed contracts, year-over-year statewide pending home sales declined for the fourth straight month in April on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 7.4 percent from 122.8 in April 2016 to 113.7 in April 2017. On a monthly basis, California pending home sales increased 5.9 percent from the March index of 107.4.
• April's year-over-year pending sales decline is the largest since July 2014, when sales decreased 9.1 percent from the previous year. The quickening pace of pending sales declines provides further evidence that the typically busy spring home buying season may underperform, primarily due to demand outstripping the supply of active listings, which was 10.5 percent lower than in April a year ago.
• At the regional level, Southern California was the most resilient region in the state, where pending sales held on for a modest decline of 2.8 percent, aided in large part by a 2 percent increase in Riverside County and a 1.1 percent uptick in Orange County. San Diego posted a double-digit decline of 11.1 percent. Los Angeles County saw pending sales decline 4.7 percent, and San Bernardino pending sales fell 4 percent.
• At the opposite end of the spectrum, the San Francisco Bay Area bore the brunt of the slowdown. On a year over year basis, pending sales in April were 17.1 percent below where they were in April 2016. San Francisco, San Mateo, and Santa Clara all posted double-digit declines in pending sales (down 16.1 percent, 12.2 percent, 14.6 percent, respectively) as inventories remained between 1.8 and 2 months of supply with median prices of more than $1 million.
• The Central Valley also posted a double-digit decline of 11.2 percent in April. Despite the rebounding energy sector and relative affordability, Kern County saw pending sales shrink by 15.5 percent from April 2016. However, Fresno, Kings, Madera, and Merced were already seeing closed sales begin to stumble back in March, and this weak reading on pending sales suggests that the sluggishness of sales will persist in the Central Valley over the near term as well.
• In C.A.R.'s newest market indicator of future price appreciation, Market Velocity – home sales relative to the number of new listings coming on line each month to replenish that sold inventory – suggests that price growth will begin to accelerate this summer. With demand remaining strong and inventories tightening further, price pressure will get more intense over the next six months and that median price growth may accelerate into the high single digits through the fall. Market Velocity is strongly correlated with increases/decreases in price growth with a roughly three- to six-month lag time.
Year-to-Year Change in Pending Sales by County/Region
|County/Region/State||Apr-17||Apr-16||Yearly % Change|
|San Francisco Bay Area||141.0||170.0||-17.1%|
* Seasonally adjusted
April REALTOR® Market Pulse Survey**:
Entering the spring homebuying season, California REALTORS® responding to C.A.R.'s April Market Pulse Survey said their expectations for market conditions of the next year declined from April as they experienced less open house traffic, fewer multiple offers, more price reductions, and no change in listing appointment activity compared with March.
• The share of homes selling above asking price dipped from 32 percent a year ago to 31 percent in April, while the share of properties selling below asking price slipped to 38 percent from 40 percent in April 2016. The remaining 31 percent sold at asking price, up from 28 percent in April 2016.
• For homes that sold above asking price, the premium paid over asking price was essentially unchanged from a year ago, at 10 percent.
• The 38 percent of homes that sold below asking price sold for an average of 17 percent below asking price in April, compared to 12 percent a year ago.
• The share of properties receiving multiple offers declined in April after trending higher for three straight months. About two-thirds of properties sold (68 percent) received multiple offers in April, down from 69 percent in April 2016.
• The share of properties receiving three or more offers in April was 44 percent, compared to 45 percent a year ago.
• Only homes priced $500,000-$749,000 and $2 million and higher posted gains in receiving three or more offers compared with last year, rising from 53 percent to 61 percent, and 50 percent and 63 percent, respectively.
• After falling for four consecutive months, listing price reductions rose to 26 percent in April, up from 23 percent in April 2016.
• A lack of available inventory continued to be the top concern for 48 percent of REALTORS®, the highest level recorded. Eroding housing affordability/high interest rates concerned 19.5 percent of REALTORS®. Inflated home prices/housing bubble was cited by 19.5 percent of REALTORS®. A slowdown in economic growth, lending and financing, and policy and regulations rounded out REALTORS®' remaining biggest concerns.
• REALTORS®' expectations of market conditions over the next year remained high at an index of 64, up from an index of 60 a year ago.
Graphics (click links to open):
• YTY change in pending home sales by region.
• Pending sales vs. closed escrow sales.
• Share of properties receiving multiple offers.
• Price range of homes receiving 3+ offers.
• Lack of inventory tops REALTORS®' concerns.
• Market Velocity – indicator of future price appreciation.
*Note: C.A.R.'s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.
**C.A.R.'s Market Pulse Survey is a monthly online survey sent to more than 10,000 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month. More than 400 REALTORS® responded.
Leading the way...® in California real estate 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 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
C.A.R. opposes SB 231 (Hertzberg), a bill that would bypass voter approval requirement for property-related fee and tax increases. SB 231 would redefine the word "sewer" for the purposes of Proposition 218 (aka the "Right to Vote on Taxes Act"), which was approved by California voters in 1996. This will allow local governments to tax property owners directly for costs related to stormwater infrastructure projects without the legally required voter approval.
Prop. 218, The Right to Vote on Taxes Initiative, requires all new property-related taxes, assessments, and most fees to be approved by the voters. There is a limited exception for charges for garbage, water, and sewer services. SB 231 would greatly expand the definition of "sewer" to include storm drainage, effectively eliminating the Prop. 218 voter approval requirement for stormwater management projects.
C.A.R. opposes SB 231 because it would allow for local governments to impose new taxes without voter approval in violation of voter-approve Proposition 218. Notwithstanding the merits of a particular project, Proposition 218 gave the decision-making authority for funding to the voters and the voters should be the ones to decide.
Please ask your Assembly Member to Vote No on SB 231. Don't allow local governments to impose sewer taxes by side-stepping voters.
REALTORS® have selected Bob Goldberg to succeed current NAR CEO Dale Stinton, who is retiring at the end of 2017 after 36 years at NAR and 12 as CEO. Goldberg currently serves as NAR senior vice president of Sales & Marketing, Business Development & Strategic Investments, Professional Development and Conventions.
NAR's leadership team chose Goldberg after an extensive national search. He has been with NAR since 1995 and will be NAR's 12th CEO since the association was founded in 1908.
"Bob's vision, business acumen, and unique ability to successfully leverage NAR's technology investments will ensure REALTORS® remain at the center of the real estate transaction," said 2017 NAR President William E. Brown, a REALTOR® from Alamo, California. "With extensive knowledge of the association and real estate industry, Bob brings with him a strong track record for future-based thinking and enacting change, which is why the NAR leadership team is extremely confident in his ability to lead the association and membership to continued future success."
In his current SVP role, Goldberg is responsible for brand and strategic marketing and association non-dues revenue, and oversees the largest employee base at NAR, with 69 division personnel. He guides a broad range of association initiatives including business development, strategic planning and partnerships, association product and marketing services and management, member professional development, competitive brand positioning, marketing, advertising and promotions, and group conventions.
June 20, 2017
California housing market bounces back in May as sales and median home price perk higher
- Existing, single-family home sales totaled 430,060 in May on a seasonally adjusted annualized rate, up 5.4 percent from April and 2.6 percent from May 2016.
- May's statewide median home price was $550,200, up 2.3 percent from April and up 5.8 percent from May 2016.
- At the regional level, the San Francisco Bay Area, Inland Empire, and Los Angeles metro area all registered year-to-year sales increases of 4.9 percent, 9 percent, and 6.9 percent, respectively.
LOS ANGELES (June 20) – California's housing market rebounded in May as existing home sales and median home price recorded strong gains on both a monthly and annual basis, a trend in every major region of the state, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 14th consecutive month and totaled a seasonally adjusted annualized rate of 430,060 units in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The May figure was up 5.4 percent from the revised 408,030 level in April and up 2.6 percent compared with home sales in May 2016 of a revised 419,000.
"Mortgage rates dropping to the lowest level since November could have been a motivating factor for the sales increase in May," said C.A.R. President Geoff McIntosh. "The low interest rate environment, however, may not last long as the Federal Reserve's gradual rate hike and plan to reduce its balance sheet will likely lead to higher rates, and could change the momentum of the market."
The statewide median price stayed above the $500,000 mark for the third straight month and reached the highest level since August 2007. The median price was up 2.3 percent from a revised $537,920 in April to reach $550,200 in May, and was 5.8 percent higher than the revised $519,930 recorded in May 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values.
"Despite a solid performance thus far in the spring housing market, the continued mismatch between buyers and available homes for sale that's driving up home prices remains an issue," said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. "Stubbornly low supply levels will continue to propel prices higher and, when combined with imminently higher interest rates, will worsen an already dismal affordability issue in the housing market."
Other key points from C.A.R.'s May 2017 resale housing report include:
• The May sales increase was wide reaching as every major region in the state posted an increase over the previous year. The Inland Empire experienced the largest sales gain with a 9 percent increase in existing home sales from last May, followed by an increase of 6.9 percent in the Los Angeles Metro Area, and a 4.9 percent rise in the San Francisco Bay Area.
• New statewide active listings declined for the 23rd month in May, falling 12.4 percent from a year ago.
• The increase in sales, coupled with the double-digit decline in active listings, worsened May's housing inventory outlook. C.A.R.'s Unsold Inventory Index fell from 3.3 months in April to 2.9 months in May. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 3.4 months in May 2016.
• At the county level, 42 of 51 reported counties experienced a drop in the unsold inventory index compared to a year ago. Alameda, San Mateo, and Santa Clara counties had the lowest inventory (1.7 months), followed by San Francisco County (1.9 months) and Sacramento (2.0 months), all in either the Bay Area or a neighboring county to the region, where supply constraints remain a serious issue.
• The median number of days it took to sell a single-family home nudged down from 24.2 days in April to 22.4 days in May and was down from 27.4 days in May 2016.
• C.A.R.'s sales-to-list price ratio* was 100 percent of listing prices statewide in May, 100 percent in April, and 99.7 percent in May 2016.
• The average price per square foot** for an existing, single-family home statewide was $267 in May, $259 in April, and $251 in May 2016.
• San Francisco County had the highest price per square foot in May at $918/sq. ft., followed by San Mateo ($875/sq. ft.), and Marin ($696/sq. ft.). Counties with the lowest price per square foot in May included Lassen ($122/sq. ft.), and Siskiyou and Del Norte ($127/sq. ft.).
• Mortgage rates continued to dip lower since early this year. The 30-year, fixed-mortgage interest rate averaged 4.01 percent in May, down from 4.05 percent in April but up from 3.6 percent in May 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates dipped in May to an average of 3.12 percent from 3.15 percent in April but was up from 2.81 percent in May 2016.
Graphics (click links to open):
• May sales at-a-glance infographic.
• Calif. historical existing home sales.
• Calif. historical median home price.
• Share of sales by price range.
• Calif. price per square foot.
• Calif. sales to list price ratio.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.
*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 39 counties.
Leading the way?® in California real estate 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 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
# # #
May 2017 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)
|May-17||Median Sold Price of Existing Single-Family Homes||Sales|
|State/Region/County||May-17||Apr-17||May-16||Price MTM% Chg||Price YTY% Chg||Sales MTM% Chg||Sales YTY% Chg|
|CA SFH (SAAR)||$550,200||$537,920||r||$519,930||r||2.3%||5.8%||5.4%||2.6%|
|Los Angeles Metro Area||$488,720||$482,420||r||$469,090||r||1.3%||4.2%||21.4%||6.9%|
|S.F. Bay Area||$899,730||$895,490||$848,580||0.5%||6.0%||21.8%||4.9%|
|S.F. Bay Area|
|San Luis Obispo||$569,000||$572,500||$540,000||r||-0.6%||5.4%||22.0%||11.7%|
|Other Counties in California|
r = revised
NA = not available
May 2017 County Unsold Inventory and Time on Market
(Regional and condo sales data not seasonally adjusted)
|May-17||Unsold Inventory Index||Median Time on Market|
|CA SFH (SAAR)||2.9||3.3||3.4||22.4||24.2||27.4||r|
|Los Angeles Metro Area||3.2||3.7||3.8||24.5||29.0||r||45.0||r|
|S.F. Bay Area||2.1||2.4||2.5||20.0||20.1||20.2||r|
|S.F. Bay Area|
|San Luis Obispo||3.6||4.0||4.4||23.7||26.4||25.9|
|Other Counties in California|
r = revised
NA = not available