The Southern California November 2018 Regional Glance
Our November 2018 regional glance shows a continuation of the trends we have been tracking in the latter half of this year. Overall, the Southern California real estate market is in the midst of a correction, with inventories in all but one of our measured markets seeing huge gains and drops in sales activity across the board. As we head into the new year, we will keep close tabs on these shifts and how they affect Southern California on the whole as well as individual communities within each region. As a reminder, the numbers below include all property types for each market and demonstrate the overall direction of a regional market. For up-to-date information specific to your local community or real estate needs, please get in touch with a Bennion Deville Homes real estate professional who can help open doors and unlock possibilities for you.
Coachella Valley November 2018 Regional Glance
Coming through the eleventh month of the year, the Coachella Valley is still recovering from the usual summer activity lull but there are signs that the market is returning just in time for winter. Overall, closed units dropped from 720 sold over the same period last year to 663 sold this year, a 7.9% dip. However, these transactions accounted for $304,228,000 in total sales volume, a 2.1% uptick compared to 2017. The average closed sales price jumped 10.9% to $458,900 and the average price per square foot went up by 5.4% to $227.60 market-wide. Inventory is down year-over-year by 9.1%, with 3,427 units available in November 2018. Those homes that did sell were on the market for an average of 75 days, 15.7% faster than 2017 (89 days). Additionally, the listing discount became more favorable to sellers, arriving at a 97.3% sale price versus list price, up 0.9% compared to the same period last year. Taking into account sales pace and available inventory, the months of inventory remained at 5.2, which is the same as in 2017. On the whole, these numbers indicate that the Coachella Valley real estate market is waking up for the peak winter/spring season. Rises in inventory, a faster sales pace, and a steady price increase are all great signs of things to come for the rest of 2018 and into 2019, especially as more consumers jump into the market around the first of the year.
Orange County November 2018 Regional Glance
Like most of Southern California, the Orange County market demonstrated a change back toward a buyer’s market in November 2018. The number of sales were down by 16.3% compared to the same period last year, with 2,025 closed transactions logged. These sales accounted for $1,807,256,000 in sales volume, a 12.3% drop from 2017. Despite drops in sales, the average sales price of a home climbed by 4.8% to $892,500 and the average price per square foot saw a 6% increase, winding up at $471.80. Inventory climbed yet again, ending at 6,772 available units, a 56.6% jump from 2017. Days on market went up to 44 days on average, compared to 42 last year, a 4.8% edge. Additionally, listing discount dropped by 1%, coming in at 96.8% sold price versus list price. The months of inventory went from 1.8 months in 2017 to 3.3 months this year, an 83.3% climb. In evaluating the numbers, we can draw a couple of conclusions. Rising inventory, coupled with increases in days on market and drops in listing discount, indicate that buyers still think the market is overvalued. As additional inventory hits the market, we may see home price modestly adjust as supply begins to satisfy demand and seller expectations becomes more realistic to market valuation.
San Diego November 2018 Regional Glance
The San Diego real estate market is nearly identical to the trends seen in Orange County. Closed sales came in at 2,281 units, down 18.6% compared to the same time last year. Sales volume for the market was down 13% from 2017, tallying $1,588,992,000 for the month. Despite these drops, however, the average closed sales price finished at $696,600, a 6.9% increase from 2017. Price per square foot was up by 7.7% as well, finishing at $389.80. Inventory nearly doubled to 7,285 available units, a 52.8% increase compared to last year. Average days on the market slowed to 33 days on average compared to 30 in 2017. Listing discount dipped slightly to 97.3%, compared to 97.9% in 2017. The months of inventory jumped to 3.2, an 88.2% increase over 2017. Massive jumps in inventory levels, longer days on market, and drops in listing discount indicate that buyers still think the market as overvalued. However, as inventory continues to grow, we should see some price correction and more aggressively priced homes as sellers realize they need to be realistic with valuing their home compared to the market in order to sell.
San Gabriel Valley October 2018 Regional Glance
With the exception of one metric, the San Gabriel Valley is experiencing the same market trends as San Diego and Orange County. The number of homes changing hands came in at 476, an 18.1% drop from the same time last year. These transactions tallied $382,133,000 in sales volume, an 11.9% drop. However, the average closed sales price climbed by 7.5% over last year, winding up at $802,800 for the month. Price per square foot also saw a modest gain of 3.1% over 2017, finishing at $410.70 per square foot. Inventory levels jumped by 36.4% to 1,696 available units. The average days on market dropped from 43 days in 2017 to 41 this year, a 4.7% decrease. Additionally, the listing discount saw a small decrease to 99.1% from 99.2% in 2017. The months of inventory nearly doubled to 3.6 months compared to 2.1 months last year. Overall, the San Gabriel Valley market is in flux, but not nearly as severe as what we are experiencing in Orange County and San Diego. With climbing inventory and a downward trend in listing discount, this market could start to see a more dramatic pricing shift. However, prices have steadily increased throughout the year, and the sales pace has increased, indicating this change will not be as drastic as some of the other markets in Southern California. We will keep an eye on how growing inventory levels affect prices, especially at the start of 2019 when activity begins to traditionally pick up again.
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