A February 2019 Regional Glance Around SoCal
Our February 2019 regional glance checks in on the predominant trends affecting the major markets around Southern California. As we have been tracking since last year, the Southern California housing market is in a state of transition, with all regions experiencing a drop in activity and variations to price and inventory levels. If you are interested in learning more about the current market conditions in a specific city, community, or neighborhood, please contact your local Bennion Deville Homes real estate professional for the most up-to-date information on your area of interest. Our goal is to open doors and unlock possibilities for you.
Coachella Valley February 2019 Regional Glance
Following up a mixed January, the Coachella Valley posted similar results in February. There were 649 homes sold, a decrease of 15.3% compared to the same period last year. The total sales volume from those sales was $326,093,000 which is a 13.1% drop from 2018 totals. However, the average closed price for a home inched up by 2.6% to $502,500. Additionally, the average price per square foot reached $244.30, a 5.4% increase over the same period in 2018. Inventory saw a slight decrease (down 1.2%) to 3,793 units available. Average days on market (sales pace) quickened by 4 days to an average of 82 days to sell a home, and the sold price versus list price was flat year-over-year, coming in at 96.4%. Accounting for inventory levels and sales pace, the Southern California Desert has a 5.8-month supply of homes. With dips in activity and only modest gains to home prices, it will be curious to monitor the desert real estate market as we push on in 2019. A faster sales pace indicates demand exists, and there could be other factors accounting for a slowing of activity, running the gamut from economic conditions, tax law updates, and interest rate levels. Traditionally behind the general trends we see in our coastal markets, this could be sign that those market conditions we tracked throughout the SoCal coast are finally reaching the desert sands. However, as a resort market, there is still reason for optimism that the market will remain buoyed by seasonal demand and the affordable lifestyle not offered by other markets around the region.
Orange County February 2019 Regional Glance
The February numbers for Orange County show that it may be the first market to complete the pendulum swing back toward a buyer’s market. Overall, there were 1,529 homes sold last month, a decrease of 15.8% compared to the same period last year. Those sales accumulated a sales volume of $1,273,283,000 which is a 19.8% decline year-over-year. Additionally, the average closed sales price dropped by 4.8%, coming in at a still robust $832,800 county-wide. The price per square foot saw a less dramatic decrease (down 1.9%) and finished at $450.80. The potential reason for the price decline – inventory levels shot up by almost 50% year-over-year, with 6,283 homes on the market. The sales pace increased to an average of 57 days on market, a 32.6% climb year-over-year, indicating a slowed demand. Listing discount (sold price versus list price) actually saw a higher amount of return for sellers, coming in at 97.7% versus 97.6% in February 2018. Factoring in sales pace and inventory levels, the Orange County market finished with 4.1 months of inventory, a 78.3% increase over the same period last year. Simple economics tells us that as more inventory hits the market, we will continue to see prices decline. Of the four major markets that we track, the OC is the first one to see a relatively sizeable dip in home prices, and this could be a sign that the market has finally shifted back. However, with only a 4.1-month supply of homes, conditions still somewhat favor sellers, but it is only a matter of time before we see that inventory level hit a healthy 7 months and beyond based on the month-to-month trends we have experienced.
San Diego County February 2019 Regional Glance
San Diego County is still in the midst of its market transition. The number of homes exchanged dropped by 14.3% year-over-year, with 1,950 homes sold in the county for the month. Those sales totaled $1,326,134,000 in sales volume, a decline of 11.9% compared to the same timeframe last year. Despite this, the average sales price for a home inched up by 2.8% to $680,100. However, the average price per square foot saw a small drop (down 0.6%), finishing at $383.60 per square foot. Inventory saw a 35.1% increase, finishing the month with 6,138 homes for sale. The average days on market (sales pace) slowed considerably, coming in at 40 days on average, a 37.9% increase. Listing discount also showed some cracks, with sold price versus list price dropping by 0.7% year-over-year to 97.4%. In total, the county has a still low 3.1-month supply of homes to meet the demand. As inventory continues to increase, the rest of the metrics should fall into shape – a drop in home prices, continued drops in home sales, and a slowing of sales pace. Since we aren’t quite on the “other side” of the transition, it will be interesting to see when that change becomes official. Despite a paltry 3.1 months of inventory, it is only a matter of time where the supply level starts to tip in the other direction and meet, or even exceed, demand levels.
San Gabriel Valley January 2019 Regional Glance
Following up January’s trends, the San Gabriel Valley is in general on the same path as San Diego. The number of homes sold dropped by 11.3% year-over-year, with 361 units exchanging hands. The total sales volume declined by 9.9%, finishing with a total of $273,713,000. However, the average closed sales price saw a modest gain (up 1.6%), to $758,200. Additionally, the average price per square foot finished at $399.90, a 2.6% increase. Just like our coastal markets, inventory saw huge jumps to 1,513 units, a 23.8% increase over last year. The average days on market slowed to 54 days, a 25.6% climb year-over-year. The average sold price versus list price dropped by 0.1% to 98.4%. Overall, there is a 4.2-month supply of homes on the market. With big increases to inventory, slowing sales pace, and some signs of decline in listing discount, the San Gabriel Valley market is toward the end of its market transition. Just like with the other major markets we monitor, as more inventory hits the market, we will start to see dips in home prices. With a shifting market, it is especially important that sellers price their homes realistically in order to attract buyers and avoid a lengthy stay on the MLS.
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