California

Housing Market
Update
Monthly Sales and
Price Statistics
August 2019
 overview

01 Economy ok, for now:

02 Some recent growth, but…

• Mostly positive signs • Why we need to have eyes wide open!

• Some red flags • Why we don’t need to panic!

03 How YOU tilt the needle:

04 Forecast slightly better:

• Buyers lack knowledge they need? • Smaller decline in sales

• You can fill that gap for them! • More growth in prices

CALIFORNIA ASSOCIATION OF REALTORS®

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Fundamentals solid… for now

GDP 2.0%
2019-Q2
Unemployment 3.7%
August 2019
Consumption 4.7%
2019-Q2
Job Growth 1.4%
August 2019
Core CPI 2.4%
August 2019

CALIFORNIA ASSOCIATION OF REALTORS®

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 Unemployment at lowest Merced
9.8%
rate in 50 years Bakersfield
Madera
Unemployment Rate Monterey
14
Stanislaus
12 Santa Cruz
10
Los Angeles 4.5%
Solano
8
Ventura
6 San Diego
Napa
4
Orange County
2 South Bay
0
San Francisco 2.2%
0% 5% 10% 15%
1/1/1976
1/1/1978
1/1/1980
1/1/1982
1/1/1984
1/1/1986
1/1/1988
1/1/1990
1/1/1992
1/1/1994
1/1/1996
1/1/1998
1/1/2000
1/1/2002
1/1/2004
1/1/2006
1/1/2008
1/1/2010
1/1/2012
1/1/2014
1/1/2016
1/1/2018

CALIFORNIA ASSOCIATION OF REALTORS®

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CA US 4
 80
85
90
95
100
105
1/1/2016
2/1/2016
3/1/2016
4/1/2016
5/1/2016
6/1/2016
7/1/2016
8/1/2016
9/1/2016
10/1/2016
11/1/2016
12/1/2016
1/1/2017
2/1/2017
3/1/2017
4/1/2017
5/1/2017
6/1/2017
7/1/2017
8/1/2017
9/1/2017
10/1/2017
11/1/2017
12/1/2017
1/1/2018
2/1/2018
3/1/2018
U. Mich. Consumer Sentiment Index

4/1/2018
5/1/2018
Consumers confidence stumbled lately

6/1/2018
7/1/2018
8/1/2018
9/1/2018
10/1/2018
11/1/2018
12/1/2018
1/1/2019
2/1/2019
3/1/2019
4/1/2019
5/1/2019
CALIFORNIA ASSOCIATION OF REALTORS®
SOURCE: University of Michigan
SERIES: Consumer Sentiment

6/1/2019
7/1/2019
5
page
 20
40
60
80
100
120

0
1/1/1978
1/1/1979
1/1/1980
1/1/1981
1/1/1982
1/1/1983
1/1/1984
1/1/1985
1/1/1986
1/1/1987
1/1/1988
1/1/1989
1/1/1990
1/1/1991
1/1/1992
1/1/1993
1/1/1994
1/1/1995
1/1/1996
1/1/1997
1/1/1998
1/1/1999
But remains near all-time high

1/1/2000
1/1/2001
1/1/2002
1/1/2003
1/1/2004
U. Mich. Consumer Sentiment Index

1/1/2005
1/1/2006
1/1/2007
1/1/2008
1/1/2009
1/1/2010
1/1/2011
1/1/2012
1/1/2013
1/1/2014
1/1/2015
1/1/2016
1/1/2017
CALIFORNIA ASSOCIATION OF REALTORS®
SOURCE: University of Michigan
SERIES: Consumer Sentiment

1/1/2018
1/1/2019
6
page
Rates near historic lows
Key Interest Rates
18 6

15 5

12 4

9 3

6 2

3 1

0 0

Spread 10-Yr Treasury 30-Yr FRM

SERIES: 30Yr FRM, 10-Yr Treasury
SOURCE: St. Louis Fed
page
CALIFORNIA ASSOCIATION OF REALTORS® 7
 Mortgage payment continued to drop

30 Yr. FRM California Median Price vs. Mortgage

6% Payment
20%
5% 4.55% 15%
4% 3.62% 10%

YTY% Chg.
5%
3%
0%
2% -5%
1% -10%

May-16
Jan-16

Sep-16
Jan-17

Jan-18

Sep-18
Jan-19
May-17

May-18

May-19
Sep-17
0%
Jan-15

Sep-15
Jan-16

Sep-16
Jan-17

Jan-18

Sep-18
Jan-19
May-15

May-16

May-17

May-18

May-19
Sep-17

Price Growth Mortgage Pmt Growth

SERIES: Price Growth vs. Mortgage Payment Growth page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
8
Why We Can’t
Celebrate
Rates look like they’re bottoming out
Key Interest Rates
5.0 2.5

4.5

4.0 2.0

3.5

3.0 1.5

2.5

2.0 1.0

1.5

1.0 0.5

0.5

0.0 0.0
1/1/19 2/1/19 3/1/19 4/1/19 5/1/19 6/1/19 7/1/19 8/1/19 9/1/19
Spread 10-Yr Treasury 30-Yr FRM

CALIFORNIA ASSOCIATION OF REALTORS®

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Buyers aren’t responding…

Purchase Mortgage Applications

70
60
Weekly % Change

50
40
30
20
10
0
-10
-20
-30

CALIFORNIA ASSOCIATION OF REALTORS®

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Why rates aren’t
spurring sales

• Tax reform: FTBs and Trade-ups

• Rates aren’t everything
• Home prices at all time highs
• Big down payments
• Inventory is still constrained
• Market still competitive
• 1st time buyers have limited options

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CALIFORNIA ASSOCIATION OF REALTORS® 12
 Other red flags/headwinds

• Yield curve inversion

• Longest expansion in U.S. history
• Trade war escalating
• Business investment floundering
• Consumer debt pretty high
• Fed lowering rates
• Stock market overvalued
• Corporate profits falling
• New construction falling
CALIFORNIA ASSOCIATION OF REALTORS®

This Photo by Unknown Author is licensed under CC BY-NC-ND

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% 49% 52%
46% 48% 48% 45%

27% 25%
22% 21% 22% 25% 24% 22% 22% 26% 23% 23%
Nov-18

Apr-19

Apr-19
Dec-18

Dec-18
Feb-19

Jun-19

Aug-19

Feb-19

Jun-19

Aug-19
Sep-18

Mar-19

Sep-18

Nov-18

Jan-19

Mar-19
Oct-18

Jul-19

Jul-19
Jan-19

Oct-18
May-19

May-19
SERIES: 2018/2019 Google Consumer Poll page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
15
 Sales dip slightly from July,
but remain above 400k

700,000 California, August 2019 Sales: 406,100 Units, -4.1% YTD, 1.6% YTY
600,000
500,000
400,000
300,000
200,000
100,000
-
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

Jan-19
Sep-17
SERIES: Sales of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
16
 A tale of two markets

August 2019 (YTY% Chg.)

10% 6.6%
5% 2.9% 3.1%
1.5%
0%
-5% -2.3%
-10% -6.6%
-15%
-15.0%
-20%

SERIES: Sales of Existing Detached Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
17
Sales by Region
August 2019 Home Sales Growth
August 2019 Home Sales by Region by Region
0.0%
-1.0% -0.4%
Other Counties
-2.0%
Central 8% -1.9%
-3.0% -2.3%
Coast
-4.0%
4% -3.8%
Central -5.0%
Valley -6.0%
23% -7.0% -6.4%

S.F. Bay
Southern
Area
California
19%
46%

CALIFORNIA ASSOCIATION OF REALTORS®

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 California home sales have the first back-to back
yearly gain since April 2018
25% Year-over-Year % Chg 6 per. Mov. Avg. (Year-over-Year % Chg)
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

SERIES: Sales of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
19
 Bay Area sales decreased both monthly
and yearly in August
30% Bay Area 6 per. Mov. Avg. (Bay Area)
20%

10%
YoY % chg.

0%
-3.8%
-10%

-20%

-30%
Jan-10

Sep-10
Jan-11

Sep-11
Jan-12

Sep-12
Jan-13

Sep-13
Jan-14

Sep-14
Jan-15

Sep-15
Jan-16

Sep-16
Jan-17

Sep-17
Jan-18

Sep-18
Jan-19
May-10

May-11

May-12

May-13

May-14

May-15

May-16

May-17

May-18

May-19
SERIES: Sales of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
20
 So. California sales
fall back slightly
So CA 6 per. Mov. Avg. (So CA)
40%
30%
20%
YoY % chg.

10%
0% -0.4%
-10%
-20%
-30%
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19
May-17
Sep-10

Sep-11

Sep-12

Sep-13

Sep-14

Sep-15

Sep-16

Sep-17

Sep-18
May-10

May-11

May-12

May-13

May-14

May-15

May-16

May-18

May-19
SERIES: Sales of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
21
 Central Valley sales slowed after
solid increase in July
30% Central Valley 6 per. Mov. Avg. (Central Valley)
20%

10%
YoY % chg.

0%
-2.3%
-10%

-20%

-30%
May-10

May-11

May-12

May-13

May-14

May-15

May-16

May-17

May-18

May-19
Jan-10

Sep-10
Jan-11

Sep-11
Jan-12

Sep-12
Jan-13

Sep-13
Jan-14

Sep-14
Jan-15

Sep-15
Jan-16

Sep-16
Jan-17

Sep-17
Jan-18

Sep-18
Jan-19
SERIES: Sales of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
22
 Pending sales still growing

10%
YTY % Chg. in Pending Sales

5% 4.4%
0%

-5%

-10%

-15%

-20%

SERIES: Percent Change in Pending Sales page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
23
 Buyers Have
More Choices Now
Active listings tightened up

California Active Listings by Month

70,000
60,000
50,000
40,000
30,000
20,000
10,000
0

2018 2019

CALIFORNIA ASSOCIATION OF REALTORS®

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 Rebalancing, not exodus

Year-over-Year % Chg
40%

30%

20%

10%

0%

-10%
-8.9%
-20% Sep-16
Mar-15

Mar-16

Mar-17

Mar-18

Mar-19
May-15
Jul-15

Nov-15

May-16
Jul-16

Nov-16

May-17
Jul-17

Nov-17

May-18
Jul-18

Nov-18

May-19
Jul-19
Jan-15

Sep-15

Jan-16

Jan-17

Sep-17

Jan-18

Sep-18

Jan-19
SERIES: Active Listing of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
26
 Supply improving at the upper end

August 2019
Active Listing
20%
10.8%
10%
4.5%
0%
-3.8%
-10%
-8.9%
-14.3% -12.8%
-20% -17.5%

SERIES: Active Listings of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
27
 Market is still tight despite recent run

18.0 August 2018: 3.3 Months; August 2019: 3.2 Months

16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

SERIES: Unsold Inventory Index of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
28
Market Less
Competitive
 Time on market rising

California, August 2019: 23.0 Days

80
70
60
DAYS ON MARKET

50
40
30
20
10
0
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
May-06

May-08

May-10

May-12

May-14

May-16

May-18
SERIES: Median Time of Market of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
30
Up in most percentiles

California Median Time on Market by Quintile

35
31
30
25 24 25 25
25 22
21 2120 20 2122 20 20 20
22
20
22
20 19 18
15
10
5
0
0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100 Total
Percentile
Aug-18 Aug-19

SERIES: Median Time on Market of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
31
 Discounting on the rise

August 2019: 98.7%, -0.3% MTM, -0.2% YTY

100%
Sales-to-List Price Ratio

98%

96%

94%

92%

90%

Jul-13
Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19
Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

Jul-12

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19
SERIES: Sales to List Ratio of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
32
 Mostly at top end of the market

California Sales-to-List Price Ratio by Quintile

100.5%
100.0% 100.0% 100.0%
100.0%
99.6%
99.5% 99.2%
98.9% 99.1% 99.0%
99.0%
98.5%
98.0% 97.7%
97.5%
97.0%
96.5%
96.0%
0-20 20-40 40-60 60-80 80-100 80-85 86-90 91-95 96-100
Aug-18 Aug-19

SERIES: Sales to List Ratio of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
33
 Still more actives cutting price

Share of Listings with a Reduced Price: 41.0%; Median Reduction Amount: -4.3%
50% 0%
45% -1%
40% -2%
35% -3%
30% -4%
25% -5%
20% -6%
15% -7%
10% -8%
5% -9%
0% -10%
9/1/2013

5/1/2018
1/1/2010
5/1/2010
9/1/2010
1/1/2011
5/1/2011
9/1/2011
1/1/2012
5/1/2012
9/1/2012
1/1/2013
5/1/2013

1/1/2014
5/1/2014
9/1/2014
1/1/2015
5/1/2015
9/1/2015
1/1/2016
5/1/2016
9/1/2016
1/1/2017
5/1/2017
9/1/2017
1/1/2018

9/1/2018
1/1/2019
5/1/2019
Share Reduced Median Reduction
SERIES: Listing Price of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
34
 But pace of cuts has slowed

Growth in Share of Listings with a Reduced Price: +1.1%

Growth in Median Reduction Amount: 0.0%
8% 0.05%
6% 0.00%
4% -0.05%
-0.10%
2%
-0.15%
0% -0.20%
-2% -0.25%
-4% -0.30%
3/1/2016

5/1/2018
1/1/2015
3/1/2015
5/1/2015
7/1/2015
9/1/2015

1/1/2016

5/1/2016
7/1/2016
9/1/2016

1/1/2017
3/1/2017
5/1/2017
7/1/2017
9/1/2017

1/1/2018
3/1/2018

7/1/2018
9/1/2018

1/1/2019
3/1/2019
5/1/2019
7/1/2019
11/1/2015

11/1/2016

11/1/2017

11/1/2018
Share Reduced Median Reduction

SERIES: Listing Price of Existing Single Family Homes page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
35
Prices Slower
As A Result
 California median price reached an all-time high

$700,000 California, August 2019: $617,410, 1.5% MTM, 3.6% YTY

$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
May-16
Jan-17
Sep-17
May-18
Jan-19
SERIES: Median Price of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
37
Top percentile saw decline in price growth

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

7% 6.3%
6% 5.5%
5%
4%
2.9%
3%
2%
1% 0.3%
0.0%
0%
-1%
-2% -1.3%
-1.9% -1.6%
-3% -2.5%
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

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
38
 Single-family homes had the largest gain in 10 months

50% Condo Single-Family Homes

40%
30%
20%
YTY% Chg. in Price

10%
0%
-10%
-20%
-30%
-40%
-50%
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
May-06

May-08

May-10

May-12

May-14

May-16

May-18
SERIES: Median Price of Existing Condo/Townhomes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
39
 Price/Square Foot slightly down
from last month and inched up from last year

$400 August 2019: $287, -1.0% MTM, 1.4% YTY

$350
PRICE PER SQ. FT.

$300
$250
$200
$150
$100
$50
$0
Jan-07

Jan-08

Jan-10

Jan-11

Jan-12

Jan-16

Jan-19
Jul-07

Jul-08
Jan-09
Jul-09

Jul-10

Jul-11

Jul-12
Jan-13

Jan-14

Jan-15
Jul-13

Jul-14

Jul-15

Jul-16
Jan-17

Jan-18
Jul-17

Jul-18

Jul-19
SERIES: Median Price Per Square Feet of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
40
Don’t
Panic
 Mortgage payment continued to drop

California Median Price vs. Mortgage Payment

20%
15%
YTY% Chg.

10%
5%
0%
-5%
-10% -7.35%
Jan-16
Mar-16

Jul-16
Sep-16
Nov-16
Jan-17
Mar-17

Jul-17
Sep-17
Nov-17
Jan-18
Mar-18

Jul-18
Sep-18
Nov-18
Jan-19
Mar-19

Jul-19
May-16

May-17

May-18

May-19
Price Growth Mortgage Pmt Growth
SERIES: Price Growth vs. Mortgage Payment Growth page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
42
 Listings prices suggest softening, not dropping

40%
Listing Price Sales Price
30%
YTY% Chg. in Price

20%

10%

0%

-10%

-20%
Jan-12

Sep-12
Jan-13

Sep-13
Jan-14

Sep-14
Jan-15

Sep-15
Jan-16

Sep-16
Jan-17

Sep-17
Jan-18

Sep-18
Jan-19
May-12

May-13

May-14

May-15

May-16

May-17

May-18

May-19
SERIES: Sales to List Ratio of Existing Single Family Homes page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
43
 Market Velocity

100%
150%

-150%
-100%
-50%
50%

0%
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Price Growth

Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Market Velocity (6 month trailing average)
California market velocity suggests more growth

Dec-18
Mar-19
Jun-19
SERIES: Market Velocity & Price Growth
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
0%
10%
20%
30%
50%
40%

-50%
-40%
-20%
-10%

-30%

44

Existing SFR Median Price

Growth
page
Why You Can’t
Celebrate either
 Many simply can’t afford to buy
2019-Q1: % able to purchase median-priced home
70%
63%
60% 57%
50%
40% 32%
30%
20%
20% 10%
10%
0%

SERIES: Housing Affordability Index of Traditional Buyers page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
46
 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
57.3%

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
53.4%

Irvine
Tustin
San Diego
Fresno
Lodi
CALIFORNIA ASSOCIATION OF REALTORS®
SOURCE: U.S. Census Bureau
SERIES: Homeownership Rates

Sacramento
San Bernardino
Escondido
50.7%

47
page
~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

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NOT our “job creators”

Net Migration by Income

5,000 1,678 566
0
-5,000
-10,000
-15,000
-20,000
-25,000
-30,000
-35,000 -33,491 -34,887
-40,000 -37,853
$25K or Less $25-$50K $50-$100K $100-$200K $200K +
CALIFORNIA ASSOCIATION OF REALTORS®
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 Net Domestic Migration by Occupation
Computer & Mathematical 4,067
Military Specific 3,900
Architecture & Engineering 3,604
Business & Financial Operations 3,481
Healthcare Practitioners & Technical 1,503
Legal 1,259
Arts, Design, Entertainment, Sports, & Media 869
Life, Physical, & Social Science 639
Farming, Fishing, & Forestry -167
Community & Social Service -523
Losing the Healthcare Support -1,938
workers we Unemployed -2,039

need Protective Service

Educational Instruction & Library
-2,403
-2,474
Personal Care & Service -2,685
Installation, Maintenance, & Repair -3,510
Food Preparation & Serving Related -5,103
Management -5,646
Production -7,504
Construction & Extraction -7,854
Building & Grounds Cleaning & Maintenance -8,019
Sales & Related -9,526
Transportation & Material Moving -13,220
Office & Administrative Support -15,865
YOU Can Move
the Needle!!
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?

CALIFORNIA ASSOCIATION OF REALTORS®

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 Homeownership still aspirational

How important is homeownership to you?

n: 1663

29%
30%
27%
23%
Percent

20%
13%

10% 8%

0%

CALIFORNIA ASSOCIATION OF REALTORS®

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 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%

CALIFORNIA ASSOCIATION OF REALTORS®

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 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%

CALIFORNIA ASSOCIATION OF REALTORS®

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 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%

CALIFORNIA ASSOCIATION OF REALTORS®

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Lots of potentially eligible renters
Income-Eligible Renters in California
Hispanic, 353,432
Black, 80,629

Asian, 150,233

40% of Income
Other, 51,143
85% of Median Price
4.11% 30-yr FRM
3.5% Downpayment
1.38% Taxes/Insurance
1% Annual PMI Fee
White, 611,381

Not Qualified,
4,620,979

CALIFORNIA ASSOCIATION OF REALTORS®

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Not just in “affordable” areas

Region Income-Eligible Renters

SoCal 669,509

Central Valley 299,780

Bay Area 161,278

Other 71,475

Central Coast 44,776

Grand Total 1,246,818

CALIFORNIA ASSOCIATION OF REALTORS®
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Key takeaways

• Low rates help sales but is the momentum is sustainable

• Price set new high but growth will remain soft to modest
• More possible rate cuts in H219
• Many want to buy but affordability remains an issue
• Market competitive, productivity/earnings to decline
• 2020 will be more difficult than 2019, but not impossible

CALIFORNIA ASSOCIATION OF REALTORS®

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Where is the market data?

CALIFORNIA ASSOCIATION OF REALTORS®

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Housing
Matters
Podcast

CALIFORNIA ASSOCIATION OF REALTORS®

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Thank You