{"id":10063,"date":"2020-07-24T20:36:27","date_gmt":"2020-07-24T20:36:27","guid":{"rendered":"https:\/\/nancyvalentine.com\/?p=10063"},"modified":"2021-10-28T12:00:19","modified_gmt":"2021-10-28T12:00:19","slug":"california-housing-market-claws-back-past-two-months-of-losses-in-june-as-median-home-price-sets-another-record-high-c-a-r-reports","status":"publish","type":"post","link":"https:\/\/nancyvalentine.com\/california-housing-market-claws-back-past-two-months-of-losses-in-june-as-median-home-price-sets-another-record-high-c-a-r-reports\/","title":{"rendered":"California housing market claws back past two months of losses in June as median home price sets another record high, C.A.R. reports"},"content":{"rendered":"

Right now, there is a tug of war playing out between normal real estate cycles and what has become a backlash against the current Covid-19 situation, aka the \u201cNew Normal\u201d. Change is happening daily and just like being on a rollercoaster ride, it is disorienting.<\/p>\n

\u201cWashington and the Fed continue to push money into the system. The historically low levels to borrow money is driving even more buyers into a market with low inventory. There is an unprecedented willingness on the part of buyers to remove all contingencies and to offer prices that cannot be backed up by comparable sales.<\/p>\n

What about the massive debt that the US is accumulating? Will it affect buyers and sellers: it depends. Many fear inflation or even hyper-inflation and the standard answer to that is to buy hard assets, like real estate. Others fear the massive debt: who\u2019s going to pay for it and how? Where is there any safety? Has real estate become \u201cthe new Treasurys\u201d?<\/p>\n

It appears that a full recovery isn\u2019t needed to boost real estate. Just hope. Many professionals believe that the work world has been changed forever and that the New Normal of work from home will remain. This dictates that changes need to be made in their living situation NOW! So closing of the credibility gap between temporary vs permanent change has catapulted the real estate market. It has been fast and violent.<\/p>\n

All of this news is on track with the C.A.R. statements and predictions:<\/p>\n

–\u00a0Existing, single-family home sales totaled 339,910 in June on a seasonally adjusted annualized rate, up 42.4 percent from May and down 12.8 percent from June 2019.<\/p>\n

–\u00a0June\u2019s statewide median home price was $626,170, up 6.5 percent from May and up 2.5 percent from June 2019.<\/p>\n

–\u00a0Year-to-date statewide home sales were down 12.9 percent in June.<\/p>\n

LOS ANGELES (July 16) \u2013 After falling to the lowest level since the Great Recession, California\u2019s housing market rebounded in June with the largest month-to-month sales increase in nearly 40 years, while the median home price set another record high, the\u00a0CALIFORNIA ASSOCIATION OF REALTORS\u00ae<\/sup>\u00a0(C.A.R.)<\/a>\u00a0said today.<\/p>\n

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 339,910 units in June, according to information collected by C.A.R. from more than 90 local REALTOR\u00ae\u00a0<\/sup>associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2020 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.<\/p>\n

Reversing a two-month consecutive drop below 300,000 units caused by the coronavirus pandemic, June\u2019s sales total climbed 42.4 percent from 238,740 in May and was down 12.8 percent from a year ago, when 389,730 homes were sold on an annualized basis. The month-to-month increase was the largest since C.A.R. began reporting monthly sales in January 1979.<\/p>\n

\u201cHome sales bounced back solidly in June after hitting a record bottom in May, as lockdown restrictions loosened and pent up demand driven by record-low interest rates roared back,\u201d said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR\u00ae<\/sup>\u00a0from Bakersfield, Calif.\u00a0\u201cWhile the momentum is expected to be sustained as we kick off the third quarter, the resurgence in coronavirus cases remains a concern and may hinder the market recovery in the second half of the year.\u201d<\/p>\n

A strong surge in home sales in June provided support to home prices, as the statewide median price set a new record high after dipping briefly below $600,000 in May. California\u2019s median home price reached $626,170 in June, improving 6.5 percent from May and 2.5 percent from June 2019. The monthly price increase was higher than the historical average price change from May to June and, in fact, was the highest ever recorded for a May-to-June change.<\/p>\n

A change in the mix of sales was one primary factor that pushed the median price higher in June, as sales of higher-priced properties bounced back stronger than lower-priced homes.<\/p>\n

Homes priced below $500,000, which made up 48 percent of total sales in the California market in May 2020, only comprised 44 percent of all sales in June 2020. Sales of million-dollar properties, on the other hand, increased in market share to 18.1 percent in the most recent month compared with 15.6 percent in May 2020.<\/p>\n

\u201cA new record high in the statewide median price suggests that there is stronger housing demand from more qualified, affluent buyers in this extremely favorable lending environment,\u201d said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. \u201cIt also highlights both the affordability and supply issues created by the uneven impact of the coronavirus pandemic as the more affordable segments of the state\u2019s housing market are recovering at a slower pace.\u201d<\/p>\n

Reflecting the uncertainty in market conditions, a monthly Google poll conducted by C.A.R. in early July found that 44 percent of consumers said it is a good time to sell, up from 40 percent a month ago, but down from 49 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying;\u00a031 percent of the consumers who responded to the poll believed that now is a good time to buy a home, sharply higher than last year, when 23 percent said it was a good time to buy a home.<\/p>\n

Other key points from C.A.R.\u2019s June 2020 resale housing report include:<\/p>\n