Last month, California housing statistics varied depending on which city you are in. While sales in Los Angeles, San Francisco, San Diego, San Jose and Orange County grew, prices were on the decline in many districts.
California is still a shining star in US housing markets, and some cities such as San Bernardino were heating up in August/September.
Predictions about California’s housing markets by CAR Realtors sees a slower market with homeowners hanging onto their homes. Without good locations to move to, and high prices for what’s available means everyone is staying put. CAR believes that will subdue sales throughout 2019.
China Tarrifs and Growth in 2019
If you’ve read the 2019 jobs report, you can understand the transition all states are in, including California.
China trade tariffs and US business repatriation could stimulate California’s economy and encourage more home building. You can view the California jobs stats. The question is about how long that process could take. The transition this fall is reducing exports and increasing imports which is obviously not good for the economy. By spring, that will change.
The Jan 1st China tariff date could stem the tide of imports and stimulate US production. You can read in more detail about local/federal political influences for the California market, and how it affects the rental market in the state. California unemployment has hit record lows, real earnings are up, and mortgage rates are rising, which feeds into price demands.
Housing Predictions for 2019
CAR’s 2019 California Housing Market Forecast projects a decline of over just over 3% in single-family home sales next year, at 396,800 sold units, slightly less 2018’s expected year end sales figure of 410,460 and that is 28,000 units less than 2017’s total sales.
Zillow expects California home prices to rise from $554,000 currently to $589,000 in October of 2019. Zillow gives California’s housing markets a 9.6 health rating overall and sees a price growth rate of 8.6%. Oddly, we’re seeing almost 1/5th of homes being sold with a price cut from previous sold price. The average home rental in California is $2500 per month.
Home Prices Expected to Continue to Rise
New residential home construction was down in August, yet is still up 6.5% Year-Over-Year. Construction spending increased $1,315 billion in August, 0.1% over July’s revised estimate and 6.5% higher than August 2017’s rate. That will not help bring housing prices down nor help see sales growth improve.
According to Zillow, home prices rose to an average of $544,000 in September. Top tier homes rose an average of $1.06 million while single family homes rose slightly to $553,000 on average. Prices of condos rose $2000 to $500,000 on average.
