"Cracks Appearing" in Southern California's Real Estate Market

 

Southern California house hunters are putting 9 percent fewer existing homes into escrow this spring, a dip that caused one analyst to make “Cracks Appearing” the title of his latest report.

ReportsOnHousing tracks regional homebuying patterns found in real estate broker networks: supply (active listings); demand (new escrows in past 30 days); and “market time” (a measure of selling speed of days it takes a typical listing to enter escrow).

Steve Thomas, the man behind ReportsOnHousing, wrote: “Noticeable cracks have appeared that illustrate a cooling market. It is not as if housing has suddenly tilted in favor of buyers. No, there are still multiple offers and plenty of homes flying off the market and into escrow just moments after the FOR SALE sign is pounded into the front yard. Buyers are still frustrated by the lack of available homes on the market below $1 million. Sellers are still in the driver’s seat. Nonetheless, trends have surfaced that highlight a cooling marketplace.”

Take the four-county region covered by the Southern California News Group. Thomas’ data from May 3 shows demand at 13,669 new escrows — down 1,341 sales contracts in 12 months or 9 percent. That’s also off 5 percent vs. the previous five years at this time of year.

 

Four-county supply of 29,118 listings was down just 46 residences in a year but 5 percent lower vs. ’13-’17.

That translated to local homes taking slightly longer to sell. Estimated market time in Los Angeles, Orange, Riverside and San Bernardino counties was 64 days — listing to escrow — up from 58 a year earlier and equal to the early-May average of 64 days in 2013-2017.

Here is how the market for existing homes fared, by county, as measured by May 5's ReportsOnHousing:

 

Los Angeles County

Market time: 57 days vs. 52 a year earlier and an average 57 days in 2013-2017.

Supply: 10,902 listings, down 55 residences for sale in a year or 1 percent; and down 5 percent vs. ’13-’17.

Demand: 5,691 new escrows, down 577 sales contracts in 12 months or 9 percent; and down 7 percent vs. previous five years.

Orange County

Market time: 61 days vs. 54 a year earlier and an average 56 days in 2013-2017.

Supply: 5,434 listings, up 47 residences for sale in a year or 1 percent; and down 2 percent vs. ’13-’17.

Demand: 2,675 new escrows, down 337 sales contracts in 12 months or 11 percent; and down 11 percent vs. previous five years.

Riverside County

Market time: 79 days vs. 75 a year earlier and an average 85 days in 2013-2017.

Supply: 8,163 listings, down 210 residences for sale in a year or 3 percent; and down 8 percent vs. ’13-’17.

Demand: 3,112 new escrows, down 257 sales contracts in 12 months or 8 percent; and down 1 percent vs. previous five years.

San Bernardino County

Market time: 63 days vs. 57 a year earlier and an average 68 days in 2013-2017.

Supply: 4,619 listings, up 172 residences for sale in a year or 4 percent; and down 1 percent vs. 2013-17 average.

Demand: 2,191 new escrows, down 170 sales contracts in 12 months or 7 percent; and up 5 percent vs. 2013-17 average.