Southern California Home Sales Hit An All-Time Low Due to Coronavirus
CoreLogic released a report that buyers closed purchases of 17,678 residences (existing and newly built) in June. While for some markets that might be a good number to see for total home sales, in Southern California that’s down 15% from this time last year. It was the slowest-selling June since 1988 and was the third consecutive monthly record low for local home buying.
Steadily high unemployment, due to “stay at home” orders designed to limit the coronavirus’ spread, has been a constant drag on the entire economy, including the real estate industry. In addition, many homeowners have chosen not to sell - perhaps fearful of the virus or the uncertainty of their finances. This has resulted in a huge cut to house hunter’s choices, depressed sales, and has helped nudge up prices.
Here are the top takeaways to note about the local housing market in June, when home buying and prices went in opposite directions.
Highly Active May-to-June
As business limitations were loosened throughout the spring - and the real estate industry better adapted to pandemic restrictions - June’s sales improved 44% from May. That’s the largest May-to-June gain on record and the eighth-largest one-month jump for any month since 1988.
Recent pending sales stats from Zillow show newly opened escrows in Los Angeles and Orange counties were close to year-ago levels as of July 11, with the Inland Empire up 10%. This suggests closings could be back to normal levels later this summer.
Record High Prices
Now, half way through July, the number of existing homes listed for sale was down 27% in a year in Los Angeles and Orange counties and down 26% in Riverside and San Bernardino counties, according to Zillow.
That short supply was a key reason why the region’s median selling price hit an all-time high of $555,500 in June, according to DQ News - up 2.9% over 12 months. That broke March’s all-time high of $550,000 as record highs were also set in Los Angeles, Orange, and San Diego counties.
Coastal Homes Hit Hard
In a strange turn of events, the sales slump in Southern California was worse along the coast where prices tend to be higher.
- Los Angeles County’s 5,063 sales were down 24.3% year over year
- Ventura County’s 781 sales were down 23.9% year over year
- Orange County’s 2,447 sales were down 22% year over year
Breaking that trend was San Diego County. Its 3,557 sales were off by only 2.4%, the region’s smallest dip, as its median price of $600,250 was up 1.7%.
San Bernardino County had the second-smallest homebuying decline: 2,501 sales, down 3%. It’s SoCal’s cheapest spot with a median of $365,000 - after a 7.4% increase. Riverside County had 3,329 sales, down 12%. Its median price of $430,000 was up 7.8%.
There is still hope for the real estate market in Southern California. One constant remains true for the summer season. Homeowners need to act fast when it comes time to make a decision, and with the lack of homes on the market, that adds more pressure.
If you’re a real estate agent in this market, know the current state of the market, but more importantly you need to understand your home buyers and sellers. Understand what position they are in, and how you can use your expertise to help find the best option for them.