CAR on California: “Low interest rates boost California housing market”

The CAR reported: Low interest rates boost California housing market as median home price sets another record, C.A.R. reports

The lowest mortgage interest rates in nearly three years helped jump start California’s housing market to post the first year-over-year sales gain and highest sales level in 15 months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Fueled by mortgage interest rates at near-three-year lows, California’s housing market recorded a second consecutive year-over-year sales increase while the median home price reached a new high, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,100 units in August, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

August’s sales figure was down 1.3 percent from the 411,630 level in July and up 1.6 percent from home sales in August 2018 of 399,600. While cumulative sales through the first eight months of the year were down from last year, the pace of decline has improved significantly at -4.1 percent since the -12.5 percent recorded in January.

“Housing demand has exhibited signs of improvement in recent months as lower rates continued to reduce the cost of borrowing for home buyers,” said C.A.R. President Jared Martin. “However, buyers remain cautious, and many are reluctant to jump in because of the economic and market uncertainty that continue to linger, and that is keeping growth subdued despite significantly lower rates.”

After 15 straight months of year-over-year increases, active listing fell 8.9 percent from year ago, marking the first back-to-back decline since March 2018 and the largest since December 2017.

The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was 3.2 months in August, unchanged from July and down from 3.3 months in August 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
emphasis added

Here is some inventory data from the NAR and CAR (ht Tom Lawler).   Note that this is the second consecutive YoY decrease in inventory in California since early 2018.

YOY % Change, Existing SF Homes for Sale
Sep-17 -8.4% -11.2%
Oct-17 -10.4% -11.5%
Nov-17 -9.7% -11.5%
Dec-17 -11.5% -12.0%
Jan-18 -9.5% -6.6%
Feb-18 -8.6% -1.3%
Mar-18 -7.2% -1.0%
Apr-18 -6.3% 1.9%
May-18 -5.1 8.3%
Jun-18 -0.5% 8.1%
Jul-18 0.0% 11.9%
Aug-18 2.1% 17.2%
Sep-18 1.1% 20.4%
Oct-18 2.8% 28%
Nov-18 4.2% 31%
Dec-18 4.8% 30.6%
Jan-19 4.6% 27%
Feb-19 3.2% 19.2%
Mar-19 1.8% 13.4%
Apr-19 1.7% 10.8%
May-19 2.1% 7.4%
Jun-19 -0.05% 2.4%
Jul-19 -1.6 -2.1%
Aug-19 NA -8.9%

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