California Housing Market Update – April 2018
May 18, 2018
In today’s post I’ve added info from C.A.R. Research and Economics on the monthly housing outlook. As apartment building investors in San Diego County it’s important to keep an eye on what’s happening in the single family housing market and be on the look out for trends or signs in a shift in apartment buildings.
Generally speaking, the more affordable houses are, the less apartments are rented out. However, there is certainly a benefit to apartments and the demand will most always be there for apartment buildings as not everyone is able to save for 20% down payment of a home or for many reasons such as someone seeking short term living for a year, maybe they are renovating or building a home, college students living in apartment units for a semester, people not interested in being tied down by a home, someone wanting the amenities or location an apartment can provide, affordability, you name it.
The report below shows us that California home sales have continued to increase year to year from April 2017 to April 2018 by 2.2% with over 400,000 units sold in April 2018 alone.
This overall year over year increase is a good sign because the 6 month moving average homes sales were actually declining each month from January 2017 all the way through January 2018.
People are spending more on homes than last year as more higher priced homes sold April 2018 than April 2017 in the $500-$749k segment, $1M-$1.999M segment and in the $2M plus segment.
The California median priced has continued to increase from it’s February 2009 Median price of $245,000, to the April 2017 median home price of $537,000 to the April 2018 median home price of $584,000.
The average price per square foot of homes in California is up 7.7% from last April at $281 from $261/foot last year.
The sales prices vs list price is still at 100% and remains unchanged since April 2017.
Despite the high prices, the median time on the market continues to decrease which is pretty crazy, with a median time of 16 days on the market.
30% of the share of home listings had price reductions with a median reduction amount of -4%.
The unsold inventory index dipped down from 3.3 months in April 2017 to 3.2 month in April 2018. This index tells us how many months it would take to sell the remaining inventory.
In the above chart we see that the active supply of single family homes increased for the first time in three years. With the highest inventory being single family homes valued at $1M plus and in particular the $3M+ category.