August 28, 2020
5 MINUTE READ
It’s been a historic period for the real estate market.
Just like the unprecedented state of the world, the implications on the housing market are difficult to keep track of. The factors tugging at the real estate industry today aren’t a part of ‘business as usual’ – but, what is these days? A longstanding pandemic sparking an economic downturn has markets all over the county in new and unfamiliar territory.
Everyone’s been waiting at the edge of their seats to browse through the data collected over the last month. In hopes of knowing what to expect and clearing up the forecast, the numbers can shine a light on what exactly is going on with CA real estate – especially in influential markets such as San Francisco, Los Angeles, San Diego, and Orange County.
In the middle of all the disruptions, here’s a look at the ‘right now’ in California’s housing markets as well as what to look out for in the coming months.
Now that major markets have been reopened for weeks, California’s seen a boost of positive growth. After the state added 140,400 new jobs in July, California’s unemployment lowered significantly by 13.3% – with month-over-month growth between June and July being higher than the national average.
437,890 homes sold in July 2020 – marking the first time that home sales passed 4K throughout the entire pandemic period. July’s home sale volume is +28.8% MTM and +6.4% YTY – a surprisingly positive turnaround so soon after re-opening.
Buyers have been active across the board as the time has finally come when sales can progress along more smoothly. The CAR reports that unsold inventory ratings are down across the state while active listings decline by 47.7% MTM as buyers eagerly rebound.
Meanwhile, the market isn’t seeing the addition of enough new listings to balance out the supply to the high demand. The demand is there, so hesitant sellers should consider moving forward.
The overall situation outlined by July’s data is the pressing reality of the upwards climb back to ‘normal’. The month-over-month outlook is briskly improving as the market is able to function more smoothly, and in some areas, July 2020 is even out beating YOY comparisons.
Here’s a rapid-fire overview of CA’s market in July:
All in all, California’s market has made significant strides forward in July.
Pointing to a Seller’s Market: The California Association of REALTORS reports that their members are feeling optimistic about the market, especially with buyers showing high interest in moving forward with transactions. However, a widespread lack of supply is a hindering factor for closing sales. That said, 54% of REALTORS said it was a good time to sell a home in California, and 33% said it was a good time for buyers.
All Eyes on Lux: While price brackets went up across the board, high-end properties had the most momentum in July. Houses priced over $3M saw a 115.6% spike in pending sales, as it continues to appear like the luxury market is regaining prominence in California post-pandemic.
Deals in the Works: Additionally, the number of statewide pending sales reached the biggest year-over-year increase since April 2012. This demonstrates that deals are moving along and there is activity in the market. Disruptions are likely slowing down the final transaction closing, but these sales will continue to convert in the coming months.
Strategize for Success: Navigating this unknown and volatile terrain is setting up to be the biggest obstacle for the industry. There seems to be substantial risks and benefits associated with each move, so both professionals and clients should keep a close eye on the data and be ready to pivot at any time.
Things are changing quickly, so keep up to speed with Reali’s upcoming market reports to stay abreast of the month-to-month progress.