2019-07-10 CA Mid Year Forecast

2019 Mid-Year
Market Forecast
July 10, 2019

Leslie Appleton-Young
SVP & Chief Economist
And Jordan Levine
Deputy Chief Economist
Economic Fundamentals
Economic fundamentals remain solid
GDP 3.1%
2019-Q1
Unemployment 3.7%
June 2019
Consumption 0.9%
2019-Q1
Job Growth 1.5%
June 2019
Core CPI 2.0%
May 2019
CALIFORNIA ASSOCIATION OF REALTORS®

page
3
Unemployment at lowest
rate in 50 years
Kern 8.4%
Fresno 7.7%
San Joaquin 6.0%
14
US Los Angeles 4.0%
12 Riverside 3.8%
San Bernardino 3.6%
10 Santa Barbara 3.5%
8 Sacramento 3.5%
Ventura 3.2%
6 San Diego 3.0%
Contra Costa 2.8%
4
San Luis Obispo 2.6%
2 Orange 2.6%
Santa Clara 2.3%
0 San Francisco 2.1%
Sep-78
Sep-80
Sep-82
Sep-84
Sep-88
Sep-90
Sep-92
Sep-94
Sep-98
Sep-00
Sep-02
Sep-04
Sep-08
Sep-10
Sep-12
Sep-14
Sep-18
Sep-76
Sep-86
Sep-96
Sep-06
Sep-16
San Mateo 1.9%
0% 2% 4% 6% 8% 10%

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4
Consumers confidence remained elevated
June 2019: 121.5

160
140
120
INDEX, 100=1985
100
80
60
40
20
0
May-06
May-08
May-10
May-12
May-14
May-16
May-18
Jan-05
Sep-05
Jan-07
Sep-07
Jan-09
Sep-09
Jan-11
Sep-11
Jan-13
Sep-13
Jan-15
Sep-15
Jan-17
Sep-17
Jan-19
SERIES: Consumer Confidence
SOURCE: The Conference Board
page
CALIFORNIA ASSOCIATION OF REALTORS® 5
Fed may Lower rates in 2019 – WHAT?
January 2012 – July 2019
6
January 2012 MONTHLY
– April 2019 WEEKLY
5
3.80
4 3.75
3.48 3.45
3
2 FRM 2.5 2.5

ARM
1 Fed Funds Rate
SERIES: 30Yr FRM, 5Yr ARM, Fed Funds Rate (Target Rate)
SOURCE: Freddie Mac, St. Louis Fed
page
Rates drop lower mortgage payment
Q1-2019 Median Price $545,820
20% Downpayment
Monthly Mortgage $160,000 Minimum Qualifying Income

$3,200
$2,760 $135,506
$2,618 $129,827
$2,800 $140,000 $124,279
$2,479 $118,870
$2,344 $113,607
$2,212 $120,000 $108,494
$2,400 $2,085 $103,539
$1,961 $98,746
$2,000 $1,841 $100,000
$1,600 $80,000
$1,200 $60,000
$800 $40,000
$400 $20,000
$0 $-
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%
SERIES: Monthly Mortgage & Min. Qualifying Income page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
7
Mortgage payment continued to decline
California Median Price vs. Mortgage Payment

20%
15%
10%
YTY% Chg.
5%
0%
-5%
-10%
Price Growth Mortgage Pmt Growth
SERIES: Price Growth vs. Mortgage Payment Growth page

8
Why low rates aren’t spurring even
more home sales
• Rates aren’t everything

• Financial incentives to trade-up have
disappeared: SALT cap
• Home prices at all time highs
• Inventory is still constrained – lots of competition;
little choice
• 1st time buyers have limited options

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9
Always Lots of Wildcards
• Mortgage rates
• Financial market turmoil/Fed policy
• GSE Reform
• Tax Bill Impacts
• 2019 ipo’s: uber, lyft, airbnb, slack, wework, planatir tech,

pinterest, postmates, robinhood

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10
Let’s Talk Housing?
Attitude towards buying and selling
Do you think it’s a good time to buy a Do you think it’s a good time to sell a
home in California? home in California?
N=300 N=300
57% 56%
51% 50% 53% 51%
46% 48% 48% 45%
27% 25%
22% 21% 22% 25% 24% 22% 22% 26%
SERIES: 2018/2019 Google Consumer Poll page

12
Sales down, price set record, inventory up
May 2019
-0.6% YTY Existing Home Sales
-6.0% YTD % change
(Not seasonally adjusted)
Unsold Median Days Sales Price to

Price Inventory Index on Market List Price Ratio
$611,190 3.2 months 18 days 99.3%

+1.7% Y2Y +6.7% Y2Y +20.0% Y2Y -0.7% Y2Y

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013
Sales above 400k for the first time in 10 months
California, May 2019 Sales: 406,960 Units

700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
May-10
Sep-05
Sep-07
Sep-09
Sep-11
Sep-13
Sep-15
Sep-17
Jan-05
May-06
Jan-07
May-08
Jan-09
Jan-11
May-12
Jan-13
May-14
Jan-15
May-16
Jan-17
May-18
Jan-19
SERIES: Sales of Existing Single Family Homes page
*Sales are seasonally adjusted and annualized SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
14
Underperform in low and high price ranges
May 2019 (YTY% Chg.)
8% 5.2%
6% 3.8%
4% 1.8% 2.0%
2%
0%
-2% -0.3%
-4%
-6% -4.2%
-8%
-10%
-12%
-14% -13.0%
SERIES: Sales of Existing Detached Homes page

15
Sales by region
May 2019 Home Sales by Region May 2019 Home Sales Growth
by Region
Other 2.0%
0.8%
Counties, 1.0%
Central 0.0%
Coast, 7% Central -1.0%
4% Valley, -2.0% -0.9% -0.9%
22% -3.0%
-2.7%
-4.0%
-5.0% -4.2%
Southern S.F. Bay

California, Area,
47% 20%
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16
Bay Area sales up for the first time since July 2018
County May-18 May-19 YTY% Chg. YTD% Chg.

Alameda 1,013 1,034 2.1% 0.9%
Contra Costa 1,090 1,172 7.5% -5.5%
Marin 239 244 2.1% 2.6%
Napa 104 115 10.6% -8.3%
San Francisco 236 234 -0.8% 2.4%
San Mateo 452 420 -7.1% -1.8%
Santa Clara 1,097 1,017 -7.3% -8.7%
Solano 427 433 1.4% -3.1%
Sonoma 390 420 7.7% -5.5%

17
So. California sales began to trend up
Los Angeles 3,987 3,989 0.1% -6.7%
Orange 1,725 1,691 -2.0% -7.6%
Riverside 2,328 2,363 1.5% -6.5%
San Bernardino 1,373 1,227 -10.6% -12.5%
San Diego 2,208 2,213 0.2% -2.5%
Ventura 461 492 6.7% -1.0%

18
Sales of existing single-family homes – Central Valley

Fresno 828 764 -7.7% -10.4%
Glenn 31 18 -41.9% 27.6%
Kern 624 549 -12.0% -2.3%
Kings 104 113 8.7% -5.9%
Madera 177 195 10.2% 9.5%
Merced 145 162 11.7% -4.9%
Placer 614 629 2.4% -1.3%
Sacramento 1,693 1,596 -5.7% -9.3%
San Benito 65 49 -24.6% -28.0%
San Joaquin 631 638 1.1% -5.2%
Stanislaus 507 545 7.5% -1.1%
Tulare 350 355 1.4% -1.8%

19
Sales of existing single-family homes – Central Coast
Monterey 2,574 2,578 0.2% -10.2%
San Luis Obispo 3,106 2,970 -4.4% -4.6%
Santa Barbara 2,697 2,483 -7.9% -1.1%
Santa Cruz 1,826 1,793 -1.8% -16.1%

20
Sales of existing single-family homes – Other counties

Butte 166 179 7.8% 36.3%
Calaveras 130 107 -17.7% -12.0%
Del Norte 19 14 -26.3% -26.3%
El Dorado 299 288 -3.7% -15.0%
Humboldt 113 127 12.4% 2.4%
Lake 81 81 0.0% -15.2%
Lassen 29 29 0.0% 0.0%
Mariposa 18 21 16.7% 13.0%
Mendocino 57 62 8.8% 12.3%
Mono 10 6 -40.0% 21.1%

21
Sales of existing single-family homes – Other counties

Nevada 121 137 13.2% 4.7%
Plumas 39 25 -35.9% 16.2%
Shasta 271 297 9.6% 9.1%
Siskiyou 50 46 -8.0% -10.7%
Sutter 92 73 -20.7% -20.1%
Tehama 35 49 40.0% 44.6%
Tuolumne 73 73 0.0% -15.0%
Yolo 180 146 -18.9% -9.6%
Yuba 85 91 7.1% 0.0%

22
Price hit new high but slow growth
$700,000 California, May 2019: $611,190, +1.4% MTM, +1.7% YTY

$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
Jan-05
Sep-05
Jan-07
Jan-09
Jan-15
May-06
Sep-07
May-08
Sep-09
Jan-11
Jan-13
May-10
Sep-11
May-12
Sep-13
May-14
Sep-15
Jan-17
Jan-19
May-16
Sep-17
May-18
SERIES: Median Price of Existing Single Family Homes page
23
Soft at the high-end
California Year-over-Year Price Growth by Quintile (May 2019)

7% 6.3%
6%
5%
4% 3.5%
3%
2%
1.0%
1%
0.1%
0%
-1% -0.7% -0.5%
-2% -1.4% -1.7% -1.4%
-3%
0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100
Percentile
SERIES: Median Price of Existing Single Family Homes page
24
Median price – Bay Area
County May-18 May-19 YTY% Chg.

Alameda $1,025,000 $959,000 -6.4%
Contra Costa $687,500 $700,355 1.9%
Marin $1,415,000 $1,400,000 -1.1%
Napa $702,500 $725,000 3.2%
San Francisco $1,620,000 $1,697,500 4.8%
San Mateo $1,600,000 $1,766,500 10.4%
Santa Clara $1,400,000 $1,335,000 -4.6%
Solano $451,000 $446,000 -1.1%
Sonoma $698,500 $666,000 -4.7%
SERIES: Median Price of Existing Detached Homes page

25
Median price – Southern California

Los Angeles $536,940 $539,480 0.5%
Orange $838,000 $845,000 0.8%
Riverside $409,920 $420,000 2.5%
San Bernardino $285,000 $315,000 10.5%
San Diego $640,000 $650,000 1.6%
Ventura $670,000 $659,500 -1.6%

26
Median price – Central Valley

Fresno $279,980 $284,900 1.8%
Glenn $230,000 $245,000 6.5%
Kern $247,750 $252,000 1.7%
Kings $235,000 $260,000 10.6%
Madera $259,000 $270,000 4.2%
Merced $262,000 $285,000 8.8%
Placer $499,650 $514,900 3.1%
Sacramento $375,000 $385,000 2.7%
San Benito $579,900 $600,000 3.5%
San Joaquin $367,860 $380,000 3.3%
Stanislaus $325,000 $335,000 3.1%
Tulare $234,950 $248,000 5.6%

27
Median price – Central Coast
Monterey $677,000 $639,000 -5.6%
San Luis Obispo $638,660 $640,000 0.2%
Santa Barbara $680,000 $696,000 2.4%
Santa Cruz $865,000 $935,000 8.1%

28
Median price – Other counties

Butte $324,100 $359,000 10.8%
Calaveras $329,000 $375,000 14.0%
Del Norte $214,000 $256,850 20.0%
El Dorado $552,000 $521,380 -5.5%
Humboldt $314,900 $315,000 0.0%
Lake $263,400 $267,000 1.4%
Lassen $215,000 $205,000 -4.7%
Mariposa $320,000 $295,000 -7.8%
Mendocino $420,000 $388,500 -7.5%
Mono $852,500 $564,500 -33.8%

29
Median price – Other counties

Nevada $404,000 $420,000 4.0%
Plumas $310,000 $350,500 13.1%
Shasta $264,000 $285,000 8.0%
Siskiyou $210,000 $235,000 11.9%
Sutter $281,000 $319,900 13.8%
Tehama $197,500 $243,000 23.0%
Tuolumne $300,000 $310,000 3.3%
Yolo $476,500 $469,500 -1.5%
Yuba $297,500 $311,000 4.5%

30
Inventory Index up due primarily
to increase in active listings
18.0
May 2018: 3.0 Months; May 2019: 3.2 Months
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
May-08
May-06
May-10
May-12
May-14
May-16
May-18
Jan-05
Sep-05
Jan-07
Sep-07
Jan-09
Sep-09
Jan-11
Sep-11
Jan-13
Sep-13
Jan-15
Sep-15
Jan-17
Sep-17
Jan-19
SERIES: Unsold Inventory Index of Existing Single Family Homes page
31
Inventory Index Highest in Millions
California Unsold Inventory Index by Segment

9 8.4
8 7.5
7
6
5 4.4
3.9 4.1 3.9
4 3.6 3.4
3.3
2.8 2.9 2.8 2.8 2.8 3.0 2.8 3.0 3.0 3.0 3.2
3
2
1
0
Under $300- $500- $750K-$1M $1-$1.25M $1.25- $1.5-$2M $2-$3M $3M + Total
$300K $500K $750K $1.5M
May-18 May-19
SERIES: Unsold Inventory Index of Existing Single Family Homes page

32
Active listings had smallest
growth since April 2018
40%
Year-over-Year % Chg
30%
20%
10% 7.4%
0%
-10%
-20%
Jan-15
Mar-15
Jul-15
Jul-16
Nov-16
Jan-17
Mar-17
Jul-17
Nov-17
Jan-18
Mar-18
Jul-18
Jan-19
Mar-19
May-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Sep-16
May-17
May-18
Sep-18
Nov-18
May-19
Sep-17
SERIES: Active Listing of Existing Single Family Homes page
33
Supply improved in all but
the lowest price segment
May 2019
Active Listing
20% 16.0%
15.9%
12.1% 11.0%
10% 7.4%
1.1%
0%
-10% -6.9%
SERIES: Active Listings of Existing Single Family Homes page

34
Active listings increased
in all regions
May-18 May-19
35,000
30,000 27,680 28,998
25,000
Active Listings
20,000
15,000
10,284 10,407
10,000 8,024
6,148
5,000 2,618 2,721
0
San Francisco Bay Southern California Central Valley Central Coast
Area
SERIES: Active Listings of Existing Single Family Homes page

35
Active listings increased
in all regions
May 2019
Sales Active Listings
40%
30.5%
Year-to-Year % Chg
30%
20%
10%
4.8% 3.9%
0.8% 1.2%
0%
-0.9% -2.7% -4.2%
-10%
San Francisco Bay Southern California Central Valley Central Coast
Area
SERIES: Sales and Listings of Existing Single Family Homes page
36
Housing affordability remains an issue
California, 1984-2019
80%
Annual Quarterly
% OF HOUSEHOLDS THAT CAN
BUY A MEDIAN-PRICED HOME
70%
60% US, 57%
50%
40%
CA, 32%
30%
20%
10%
0%
SERIES: Housing Affordability Index of Traditional Buyers page

37
Many simply can’t afford to buy
2019-Q1: % able to purchase median-priced home
70%
63%
60% 57%
50%
40% 32%
30%
20% 10%
10%
0%
SERIES: Housing Affordability Index of Traditional Buyers page

38
How wages stack up against prices?
California
2018 Annual Mean Wage
$140,000 $127,950 $126,490
$120,000 $101,380 $106,950
$100,000 $81,580
$80,100
$80,000
$60,000
$31,460
$40,000
$20,000
$0
Retail Teachers Firefighters Police Nurses Developers Min. Inc
Salespersons Required to
Buy a Med.
Home
SOURCE: Bureau of Labor Statistics, C.A.R. page

39
CA’s Homeownership< U.S.
• Click
75% to edit Master
CA text
US styles
• Second level
70% Peak: 69.0%
Third level
•64.5%
65% 63.9%
• Fourth level
60% • Fifth level
Peak: 60.2%
54.4%
55%
53.7%
50%
45%
SERIES: Homeownership Rates

SOURCE: U.S. Census Bureau
page
0%
10%
20%
30%
40%
50%
60%
70%
Hawthorne
80% 76.0%
Santa Monica
East Los Angeles
Glendale
Inglewood
San Francisco
Los Angeles
Bellflower
Alhambra
El Cajon
Florence-Graham
Oakland
Costa Mesa
Merced
Long Beach
Burbank
Arden-Arcade
Mountain View
Santa Barbara
El Monte
Pasadena
Santa Clara
South Gate
Chico
Lynwood
Berkeley
Majority renter cities will surprise you
Anaheim
Alameda
Salinas
Santa Ana
Santa Cruz
2017 California Renter Rate by City
Davis
Madera
Sunnyvale
Irvine
Tustin
San Diego
Fresno
Lodi
SOURCE: U.S. Census Bureau
SERIES: Homeownership Rates
Sacramento
San Bernardino
Escondido
50.7%
41
page
Here’s the problem:
At some point a supply problem
becomes a demand problem.
~750k people have left since 2010
California Net Domestic Migration

0
-20,000
-24,972
-40,000
-41,362
-60,000
-57,563 -60,839
-80,000
-100,000
-104,317 -105,210
-120,000
-140,000
-160,000
-163,922
-180,000 -169,336
2010 2011 2012 2013 2014 2015 2016 2017
page
43
Step 1: SF Bay to Cheaper Markets
Core San Francisco Bay Area Out Migration (2010-2016)
-8,559 -9,005
-11,659
-12,408
-13,053
-15,244
-17,697
-25,843
Elsewhere in CA -30,268
Another State
-42,777
Merced Solano Washington Stanislaus Santa Cruz Texas Nevada (ST) Oregon San Joaquin Sacramento
MSA
page
44
Step 2: Pricing Prior Residents Out of State
Sacramento MSA Out Migration

(2010-2016)
-2,260
-2,715 -2,917
-3,596
-4,002 -4,029 -4,179
-5,020 -5,127
Elsewhere in CA
Another State
-8,166
Kentucky Santa Cruz Oklahoma Colorado Sutter & San Luis San Oregon Idaho Nevada (ST)
Yuba Obispo Bernardino
page
45
Step 1: SoCal coastal to cheaper markets
Coastal Southern California Out Migration (2010-2016)
-19,854
-21,935
-34,217 -40,361
-42,503
-48,609
-65,534
-79,132
Elsewhere in CA
Another State -101,914
-124,148
Santa Colorado Oregon Washington Kern Nevada Arizona Texas San Riverside
Barbara (ST) Bernardino
page
46
Step 2: pricing prior residents out of state
Inland Empire Out Migration

(2010-2016)
-3,575
-5,117
-7,732 -7,970 -8,344
-10,604
-10,680
Elsewhere in CA -10,699
Another State
-16,374
-17,859
Hawaii Colorado Nevada Idaho North Utah Georgia Kern Arizona Texas
(ST) Carolina County
page
47
Best performing cities are
everywhere Milken Institute Annual Report 2018
the rules of the game are changing and it's all
about jobs and housing. not just about the
coasts anymore
Top 10 best performing large cities
1 2 3 4 5
Provo-Orem, San Jose- Austin-Round San Francisco- Dallas-Plano-

Sunnyvale-Santa Redwood City-
UT MSA Rock, TX MSA Irving, TX MD
Clara, CA MSA South SF, CA MD
Change: Steady Change: +9 Change: +6 Change: Steady Change: -2
6 7 8 9 10
Raleigh, NC Orlando- Seattle Fort Collins, Salt Lake City,

MSA Kissimmee- Bellevue- CO MSA UT MSA
Sanford, FL MSA Everett, WA MD
Change: -4 Change: Steady Change: -4 Change: Steady
Change: +9
page
Source: Milken Institute 50
Biggest gains among large cities
Metropolitan Statistical Area (MSA)/
Metropolitan Division (MD) 2018 Rank Change
Merced, CA MSA 38 56
Norwich-New London, CT MSA 123 54
Tucson, AZ MSA 102 52
Lansing-East Lansing, MI MSA 89 49
Myrtle Beach-Conway-North Myrtle Beach, SC-NC… 51 48
Scranton-Wilkes-Barre-Hazleton, PA MSA 85 36
Kennewick-Richland, WA MSA 148 36
Albuquerque, NM MSA 66 35
Tallahassee, FL MSA 82 35
Trenton, NJ MSA 125 35 page

Top 10 best performing small cities
1 2 3 4 5
Bend- St. George, Gainseville, Elkhart- Coeur

Redmond, UT MSA GA MSA Goshen, IN d’Alene, ID
OR MSA Change: Steady Change: Steady MSA MSA
Change: Steady Change: +2 Change: +24
6 7 8 9 10
San Rafael, Medford, OR Athens-Clark Albany, OR Logan, UT-ID

CA MSA MSA County, GA MSA MSA
MSA
Change: -2 Change: +21 Change: +13 Change: +14
Change: +34
page
Homeownership? Aspirational v. Attainable
The desire
•• Click for homeownership
to edit remains strong
Master text styles
• Second level
• First-time buyers face often insurmountable obstacles
• Third level
• Fourth level
• Government policies do not support housing as in the past
• Fifth level
• More Millennials are making the difficult choice to leave
• Their ability to build wealth over time is compromised
• Where will our children live?

page
53
Homeownership still aspirational
How important is homeownership to you?

n: 1663
29%
30%
27%
23%
Percent
20%
13%
10% 8%
0%

page
54
But vastly over-estimate downpayment
How much downpayment is required to purchase a home?

n: 1681
40%
40%
33%
30%
Percent
19%
20%
10%
4% 4%
0%

page
55
Most renters would buy with little down
If you could qualify for a mortgage with a much lower down-payment would you buy?
n: 1716
69%
60%
Percent
40%
31%
20%
0%

page
56
Only 30% know of low-down loans
Are you aware of (FHA) backed loans that require only a 3.5% downpayment
n: 1716
Percent
72%
60%
40%
28%
20%
0%

page
57
The Industry
Membership gains outstripping sales
Sales Peaks: 1978, 1988, 2004-05

Membership Peaks: 1980, 1990, 2006
250,000
600,000
500,000 200,000
Membership
Home Sales
400,000 150,000
300,000
100,000
200,000
50,000
100,000
0 0
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Home Sales Membership
page
59
Number of Transactions
10
12
0
2
4
6
8
1971
1972
1973
10.4
1974
1975 1972 Peak:
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2.8
Member productivity has started declining
2008
2009
2007 Trough:
2010
2011
2012
2013
2014
2015
2016
Long Run Average: 6.5
2017
2017: 4.2
2018
2018: 3.9
2019p
60
page
… drop in average earning triggers drop in membership
Earnings Peaks: 1978, 1988, 2004-05

Membership Peaks: 1980, 1990, 2006
250,000 $60,000
$50,000
200,000
$40,000
150,000
$30,000
100,000
$20,000
50,000
$10,000
0 $0
1979
1985
1971
1973
1975
1977
1981
1983
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Membership Avg. Member Earning
page
61
Your Competition:
You yesterday and every agent
working harder than you do.
Don’t let them.
The Forecast
U.S. economic outlook
2015 2016 2017 2018 2019f
US GDP 2.6% 1.6% 2.3% 2.9% 2.4%
Nonfarm Job Growth 2.1% 1.8% 1.4% 1.6% 1.5%
Unemployment 5.3% 4.9% 4.4% 3.9% 3.7%
CPI 0.1% 1.4% 2.0% 2.4% 2.0%
Real Disposable Income, % Change 3.4% 2.7% 2.1% 2.9% 2.4%
30-Yr FRM 3.9% 3.6% 4.0% 4.5% 4.0%

page
SERIES: U.S. Economic Outlook
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® 64
California housing market outlook
2019p
2015 2016 2017 2018 2019p
(revised)
SFH Resales (000s) 409.4 417.7 424.9 402.8 375.1 385.5
% Change 7.0% 2.0% 1.7% -5.2% -6.9% -4.3%
Median Price ($000s) $476.3 $502.3 $537.9 $570.0 $568.8 $593.0
% Change 6.6% 5.4% 7.1% 6.0% -0.2% 4.0%
Housing Affordability
31% 31% 29% 28% 32% 32%
Index
30-Yr FRM 3.9% 3.6% 4.0% 4.5% 4.4% 4.0%
page
SERIES: CA Housing Market Outlook CALIFORNIA ASSOCIATION OF REALTORS®
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® 65
Key takeaways
• Low rates help sales but is the momentum is sustainable

• Price set new high but growth will remain soft to modest
• Uncertainties put downward pressure on rates; possible rate cuts in H219
• Many want to buy but affordability remains an issue
• Market remains competitive, productivity/earning likely to decline

page
66
Where is the market data?

page
67
Housing
Matters
Podcast

page
69
Thank You
This presentation can be found on
www.car.org/marketdata
Speeches & Presentations
lesliea@car.org

2019-07-10 CA Mid Year Forecast

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2019 Mid-Year

July 10, 2019

CALIFORNIA ASSOCIATION OF REALTORS®

CALIFORNIA ASSOCIATION OF REALTORS®

June 2019: 121.5

2 FRM 2.5 2.5

Monthly Mortgage $160,000 Minimum Qualifying Income

SERIES: Monthly Mortgage & Min. Qualifying Income page

California Median Price vs. Mortgage Payment

Price Growth Mortgage Pmt Growth

SERIES: Price Growth vs. Mortgage Payment Growth page

• Rates aren’t everything

CALIFORNIA ASSOCIATION OF REALTORS®

• Tax Bill Impacts

• 2019 ipo’s: uber, lyft, airbnb, slack, wework, planatir tech,

CALIFORNIA ASSOCIATION OF REALTORS®

SERIES: 2018/2019 Google Consumer Poll page

Unsold Median Days Sales Price to

$611,190 3.2 months 18 days 99.3%

CALIFORNIA ASSOCIATION OF REALTORS®

California, May 2019 Sales: 406,960 Units

May 2019 (YTY% Chg.)

SERIES: Sales of Existing Detached Homes page

Southern S.F. Bay

County May-18 May-19 YTY% Chg. YTD% Chg.

SERIES: Sales of Existing Detached Homes page

County May-18 May-19 YTY% Chg. YTD% Chg.

Los Angeles 3,987 3,989 0.1% -6.7%

Orange 1,725 1,691 -2.0% -7.6%

Riverside 2,328 2,363 1.5% -6.5%

San Bernardino 1,373 1,227 -10.6% -12.5%

San Diego 2,208 2,213 0.2% -2.5%

Ventura 461 492 6.7% -1.0%

SERIES: Sales of Existing Detached Homes page

County May-18 May-19 YTY% Chg. YTD% Chg.

SERIES: Sales of Existing Detached Homes page

County May-18 May-19 YTY% Chg. YTD% Chg.

Monterey 2,574 2,578 0.2% -10.2%

San Luis Obispo 3,106 2,970 -4.4% -4.6%

Santa Barbara 2,697 2,483 -7.9% -1.1%

Santa Cruz 1,826 1,793 -1.8% -16.1%

SERIES: Sales of Existing Detached Homes page

County May-18 May-19 YTY% Chg. YTD% Chg.

SERIES: Sales of Existing Detached Homes page

County May-18 May-19 YTY% Chg. YTD% Chg.

SERIES: Sales of Existing Detached Homes page

$700,000 California, May 2019: $611,190, +1.4% MTM, +1.7% YTY

California Year-over-Year Price Growth by Quintile (May 2019)

County May-18 May-19 YTY% Chg.

SERIES: Median Price of Existing Detached Homes page

County May-18 May-19 YTY% Chg.

SERIES: Median Price of Existing Detached Homes page

County May-18 May-19 YTY% Chg.

SERIES: Median Price of Existing Detached Homes page

County May-18 May-19 YTY% Chg.

Monterey $677,000 $639,000 -5.6%

San Luis Obispo $638,660 $640,000 0.2%

Santa Barbara $680,000 $696,000 2.4%

Santa Cruz $865,000 $935,000 8.1%

SERIES: Median Price of Existing Detached Homes page

County May-18 May-19 YTY% Chg.

SERIES: Median Price of Existing Detached Homes page

County May-18 May-19 YTY% Chg.

SERIES: Median Price of Existing Detached Homes page