CoreLogic tells us the California housing market displayed a semblance of strengthening in April 2019. Statewide, existing home and condominium sales increased +10.7% from March 2019 but those April 2019 sales represented the lowest number of sales for the month of April in 5 years. Down -4.6% from April 2018, this annual decline was the smallest percentage decline since sales began falling y/y last August.
Home sales “normally” increase between the months of March and April…since 20000, the average increase between these two months has been +18%. However, this normal increase decreased in April 2019 at all price points. Take a look:
- Homes selling below $300,000 fell -12.2% y/y.
- Homes selling below $500,000 fell -7.4% y/y.
- Homes selling above $500,000 fell -2.8%.
- Homes selling above $1M fell – 4.5%.
- Homes selling about $2M fell -2.7%.
The median price paid for all new and existing homes and condos in California during April 2019 was $497,000. This figure represents an increase of +3.5% from March 2019 and an increase of +2.5% from April 2018.
CoreLogic predicts that IF mortgage rates remain low, prices remain flat and inventory continues to increase, the market shift towards buyers will render buyers more power at the bargaining table.
In the six-county Southern California region, sales of new and existing homes/condos decreased -3.3% in April 2019. The median price in the region was $527,500, an increase of +1.4% y/y.
In the nine-county San Francisco Bay Area, sales of new and existing homes/condos decreased -7.6% y/y and the median sales price remained the same as last year, standing at $850,000.
Gains in annual sales increased in the following California counties:
- Yuba – +13.6%
- Butte – +8.1%
- San Francisco – +5.1%
- Ventura – +3.2%
- San Joaquin – +2.3%
Redfin complemented the CoreLogic data with its own data for May 2019 regarding an increase in bidding wars in the San Francisco housing market. A whopping 35% of Redfin offers in San Francisco faced bidding wars in May whereas only 16% faced bidding wars nationally. Redfin chocks up those increased bidding wars to IPOs happening with San Francisco-based businesses such as Uber and Lyft.
According to Redfin agent Miriam Westberg, “We’re seeing as many as 33 offers on one property recently and most of those offers have no contingencies or are all cash offers substantially higher than the list price. “
Per Redfin, nationally, bidding wars were down -14%; bidding wars in San Francisco were up +35%; bidding wars were down -16% in San Jose; and bidding wars were down -14%.
Daryl Fairweather, chief economist with Redfin, said, “Earlier this year, the San Francisco housing market appeared to be running out of gas, but recent tech IPO’s have reignited competition. Buyers want to get in now before prices shoot up while many would-be sellers are holding out for higher prices…What you have is a recipe for bidding wars.”
