In California, Home Sales Are Plunging Like It Is 2008 All Over Again
by Michael Snyder
TheEconomicCollapseBlog.com
November 2, 2018
What goes up must eventually come down. For years, the California housing market was on the cutting edge of “Housing Bubble 2” as we witnessed home prices in the state soar to absolutely absurd levels. In fact, it got so bad that a burned down house in Silicon Valley sold for $900,000 earlier this year, and a condemned home in Fremont sold for $1.2 million. But now things have changed in a major way. The hottest real estate markets in the entire country led the way down during the collapse of “Housing Bubble 1”, and now it looks like the same thing is going to be true for the sequel.
According to CNBC, the number of new and existing homes sold in southern California was down 18 percent in September compared to a year ago…
The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic. That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting.
Sales have been falling on an annual basis for much of this year, but this was the biggest annual drop for any month in almost eight years. It was also more than twice the annual drop seen in August.
Those numbers are staggering.
And it is interesting to note that sales of new homes are being hit even harder than sales of existing homes…
Sales of newly built homes are suffering more than sales of existing homes, likely because fewer are being built compared with historical production levels. Newly built homes also come at a price premium. Sales of newly built homes were 47 percent below the September average dating back to 1988, while sales of existing homes were 22 percent below their long-term average.
At one time, San Diego County was a blazing hot real estate market, but now the market has turned completely around.
In fact, the county just registered the fewest number of home sales in a month since the last financial crisis…
A combination of rapid mortgage rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last month, in the first meaningful sign that one of the country’s hottest real estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.
In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.
And it can be argued that things are plunging even more rapidly in northern California.
In the San Francisco Bay area, sales of new and existing homes were down 19 percent in September on a year over year basis…
Home sales in the San Francisco Bay area have been falling for months, but in September buyers pulled back in an even bigger way.
Sales of both new and existing homes plunged nearly 19 percent compared with September 2017, according to CoreLogic. It marked the slowest September sales pace since 2007 and twice the annual drop seen in August.
If a new real estate crisis is really happening, these are precisely the kinds of numbers that we would expect to see. If you still need some more convincing, here are even more distressing numbers from the California real estate market that Mish Shedlock recently shared…
The California housing market posted its largest year-over-year sales decline since March 2014 and remained below the 400,000-level sales benchmark for the second consecutive month in September, indicating that the market is slowing as many potential buyers put their homeownership plans on hold.
Existing, single-family home sales totaled 382,550 in September on a seasonally adjusted annualized rate, down 4.3 percent from August and down 12.4 percent from September 2017.
September’s statewide median home price was $578,850, down 2.9 percent from August but up 4.2 percent from September 2017.
Statewide active listings rose for the sixth consecutive month, increasing 20.4 percent from the previous year.
Inventory reached the highest level in 31 months, with the Unsold Inventory Index reaching 4.2 months in September.
September year-to-date sales were down 3.3 percent.
The Rest…HERE
