2019-05 Monthly Housing Market Webinar

California Housing
Market Update –
May 2019
June 17, 2019
Oscar Wei
Senior Economist
Overview
• Sales have improved… but will the momentum continue?

• California set a new record price, should we expect more growth?
• Inventory growth has been slowing down, but continue to increase
from last year
• Declining interest rates lower mortgage payments, but affordability
remains an issue
CALIFORNIA ASSOCIATION OF REALTORS®

page
2
Housing confidence up, near recent high
SERIES: Home Purchase Sentiment Index page

SOURCE: Fannie Mae
3
Attitude towards home buying surged
SERIES: Home Purchase Sentiment Index page

SOURCE: Fannie Mae
4
Is it a good time to buy or sell?
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% 53% 51%
48% 50% 48%
46% 45%
27% 25% 25% 26%

22% 22% 24% 22% 22%
21%
SERIES: 2018/2019 Google Consumer Poll page

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
5
Sales rose above 400k for the
first time in 10 months
700,000
California, May 2019 Sales: 406,960 Units, -6.0% YTD, -0.6% YTY
600,000
May-18: May-19:
409,270 406,960
500,000
400,000
300,000
200,000
100,000
SERIES: Sales of Existing Single Family Homes page

*Sales are seasonally adjusted and annualized SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
6
California home sales had the smallest decline
in 13 months
Year-over-Year % Chg 6 per. Mov. Avg. (Year-over-Year % Chg)
25%
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

*Sales are seasonally adjusted and annualized SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
7
Sales Up in Mid-Priced Ranges
May 2019 (YTY% Chg.) Share by Price Segment

8% 0% 10% 20% 30%
5.2%
6% 3.8%
4% $0 - $299k 12.5%
1.8% 2.0%
2%
$300 - $399k 15.4%
0%
-2% -0.3%
$400 - $499k 14.0%
-4%
-6% -4.2%
$500 - $749k 24.5%
-8%
-10% $750 - $999k 11.4%
-12% $1,000 -
-14% -13.0% 13.6%
$1,999k
$2,000k+ 4.5%
SERIES: Sales of Existing Detached Homes page

8
Sales by Region
May 2019 Home Sales Growth
May 2019 Home Sales by Region
Other
by Region
Counties, 7% 2.0%
Central
Coast, 4% 1.0% 0.8%
Central 0.0%
Valley, 22%
-1.0%
-0.9% -0.9%
-2.0%
S.F. Bay -3.0% -2.7%

Southern Area, 20%
-4.0%
California,
-4.2%
47% -5.0%
Central S.F. Bay Southern Central Other
Valley Area California Coast Counties
Growth

page
9
Bay Area sales increased for the
first time since July 2018
Bay Area 6 per. Mov. Avg. (Bay Area)
30%
20%
10%
YoY % chg.
0% 0.8%
-10%
-20%
-30%
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-10
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-18
Sep-17
May-10
May-11
May-12
May-13
May-14
May-15
May-16
May-17
May-18
May-19
*Sales are not seasonally adjusted and annualized SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
10
Sales of existing single-family homes – bay area
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%

11
So. California sales still down
but began to trend Up
YoY % chg. So CA 6 per. Mov. Avg. (So CA)
40%
30%
20%
10%
-0.9%
0%
-10%
-20%
-30%

*Sales are not seasonally adjusted and annualized SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
12
Sales of existing single-family homes – southern california

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%

13
Central valley sales dipped slightly
more than the Bay Area and So CA
YoY % chg. Central Valley 6 per. Mov. Avg. (Central Valley)
30%
20%
10%
0%
-2.7%
-10%
-20%
-30%
*Sales are not seasonally adjusted and annualized SERIES: Sales of Existing Single Family Homes page
14
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%
15
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%

16
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%
17
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%

18
California median price set a
new high again in May 2019
California, May 2019: $611,190, +1.4% MTM, +1.7% YTY May-18: May-19:
$600,860 $611,190
P: May-07
$700,000 $594,530
$600,000
$500,000 T: Feb-09
$245,230
$400,000 -59% from
peak
$300,000
$200,000
$100,000
$-
SERIES: Median Price of Existing Single Family Homes page

19
Mortgage payment declined for three straight
months as rates hit the lowest level in 16 months
30 Yr. FRM California Median Price vs. Mortgage Payment
6%
20%
5% 4.59% 15%
4.07%
4% 10%
YTY% Chg.
3% 5%
0%
2%
-5%
1%
-10%
Jul-16
Jul-17
Jul-18
Jan-16
Jan-17
Jan-18
Jan-19
Oct-16
Oct-17
Oct-18
Apr-16
Apr-17
Apr-18
Apr-19
0%
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Sep-15
Sep-16
Sep-17
Sep-18
May-15
May-16
May-17
May-18
May-19 Price Growth Mortgage Pmt Growth
SERIES: Price Growth vs. Mortgage Payment Growth page

20
Home prices inched up but
the pace of growth slowed in May
50% Condo Single-Family Homes
40%
30%
20%
YTY% Chg. in Price
10%
0%
-10%
-20%
-30%
-40%
-50%
SERIES: Median Price of Existing Condo/Townhomes page

21
Year-over-Year Price Growth by Percentile
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% -1.4%
-1.7%
-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

22
Price/Square Foot Reached the
Highest Level since Late 2007
$400 May 2019: $292, Up 0.7% MTM, Up 2.1% YTY
$350 May-18: May-19:
$286 $292
$300
PRICE PER SQ. FT.
$250
$200
$150
$100
$50
$0
SERIES: Median Price Per Square Feet of Existing Single Family Homes page
23
Median price of existing single-family homes –
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

24
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%

25
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%
26
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%

27
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%
28
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%

29
Sales Price-to-List Price highest in last 10 months as the
market moved into the peak of the season
May-18:
May 2019: 99.3%, +0.4% MTM, -0.7% YTY 100.0%
May-19:
99.3%
100%
98%
Sales-to-List Price Ratio
96%
94%
92%
90%
SERIES: Sales to List Ratio of Existing Single Family Homes page

30
Time on market at lowest level in
10 Months, but Still Up YTY
California, May 2019: 18.0 Days
80
70
60
DAYS ON MARKET
50
40
30
20
10
SERIES: Median Time of Market of Existing Single Family Homes page

31
Inventory Index Up Due Primarily
to Increase in Active Listings
18.0
16.0
May 2018: 3.0 Months; May 2019: 3.2 Months
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Note: “Unsold Inventory Index” represents the number of months it would

take to sell the remaining inventory for the month in question. The remaining
inventory for the month is defined as the number of properties that were SERIES: Unsold Inventory Index of Existing Single Family Homes page
“Active”, “Pending”, and “Contingent” (when available) and divide the
sum by the number of “Sold” properties for the month in question.
32
Active Listings Had Smallest
Growth since Apr 2018
Year-over-Year % Chg
40%
30%
20%
10% 7.4%
0%
-10%
-20%
SERIES: Active Listing of Existing Single Family Homes page

33
Supply improved in all but
the lowest price segment
May 2019
Active Listing
20%
15.9% 16.0%
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 28,998
27,680
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 Area Southern California Central Valley Central Coast
SERIES: Active Listings of Existing Single Family Homes page

35
Active Listings Increased in
All Regions May 2019
Sales Active Listings
40%
30.5%
30%
Year-to-Year % Chg
20%
10%
4.8% 3.9%
0.8% 1.2%
0%
-0.9%
-2.7%
-4.2%
-10%
San Francisco Bay Area Southern California Central Valley Central Coast
SERIES: Sales and Listings of Existing Single Family Homes page

36
Outlook
Economic fundamentals remain solid
GDP 3.1%
2019-Q1
Unemployment 3.6%
May 2019
Consumption 1.3%
2019-Q1
Job Growth 1.6%
May 2019
Core CPI 2.0%
May 2019

page
38
Unemployment at lowest rate in 50 years
Kern 8.4%
14
US California Fresno 7.7%
San Joaquin 6.0%
12
Los Angeles 4.0%
Riverside 3.8%
10 San Bernardino 3.6%
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%
Orange 2.6%
2 Santa Clara 2.3%
San Francisco 2.1%
0 San Mateo 1.9%
Sep-76
Sep-78
Sep-80
Sep-82
Sep-86
Sep-88
Sep-90
Sep-92
Sep-94
Sep-96
Sep-98
Sep-00
Sep-02
Sep-04
Sep-06
Sep-08
Sep-10
Sep-14
Sep-16
Sep-18
Sep-84
Sep-12
0% 2% 4% 6% 8% 10%

page
39
Consumers confidence highest in 6 months
May 2019: 134.1

160
140 134.1
120
100
INDEX, 100=1985
80
60
40
20
0
SERIES: Consumer Confidence

SOURCE: The Conference Board
page
SOURCE: The Conference Board CALIFORNIA ASSOCIATION OF REALTORS® 40
Fed may not raise rate again in 2019
January 2012 – June 2019
6 MONTHLY WEEKLY
January 2012 – April 2019
5
4.07
3.82
4
3.65 3.51
3
Fed Raise Rate
2 FRM the 1st time since 2.5 2.5
mid-2006
ARM
1 Fed Funds Rate
SERIES: 30Yr FRM, 5Yr ARM, Fed Funds Rate (Target Rate)
SOURCE: Freddie Mac, St. Louis Fed
page
CALIFORNIA ASSOCIATION OF REALTORS® 41
Rates dipped below 4%

SERIES: 30 Yr. Fixed Mortgage Rates
SOURCE: Mortgage News Daily
page
SOURCE: The Conference Board CALIFORNIA ASSOCIATION OF REALTORS® 42
Mortgage demand expected to improve
SERIES: Q2 2019 Mortgage Lender Sentiment Survey page

SOURCE: Fannie Mae
43
YTY % Chg. in Pending Sales
0%
2%
4%
-8%
-6%
-4%
-2%
-18%
-16%
-14%
-12%
-10%
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
the first time in 3 months
Dec-17
Jan-18
Feb-18
Mar-18
Pending sales growth dipped for
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
SERIES: Percent Change in Pending Sales
Apr-19
May-19
44
page
List price growth suggests an upward trend
in the short term
California Median Sales vs. List Price Growth
40%
30%
YTY% Chg. in Price
20%
10%
0%
-10%
-20%
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Apr-14
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Apr-12
Jul-12
Apr-13
Jul-13
Jul-14
Apr-15
Jul-15
Apr-16
Jul-16
Apr-17
Jul-17
Apr-18
Jul-18
Apr-19
Listing Price Sales Price
SERIES: Sales to List Ratio of Existing Single Family Homes page

45
Consumer price expectations

page
46
How tariffs threaten the economy and
affect the housing market
The Impact of Trade Tariffs
• Slow down world trade activities and

global economic growth
• Result in exchange rate fluctuation
• Increase inflationary pressure and put
upward pressure on interest rates
• Increase costs of construction
• Disrupt local economic activities in
areas/businesses that rely heavily on
import/export

page
47
Housing affordability remains an issue
California, 1984-2019
80%
Annual Quarterly
% OF HOUSEHOLDS THAT CAN BUY A
70%
60% US, 57%

MEDIAN-PRICED HOME
50%
40%
CA, 32%
30%
20%
10%
0%
SERIES: Housing Affordability Index of Traditional Buyers CALIFORNIA ASSOCIATION OF REALTORS®

page
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® 48
Many simply can’t afford to buy
70% 2019-Q1: % able to purchase median-priced home
63%
60% 57%
50%
40%
32%
30%
20%
10%
10%
0%
SERIES: Housing Affordability Index of Traditional Buyers page

49
How wages stack up against prices?
California
$127,950
$140,000 2018 Annual Mean Wage $126,490
$106,950
$120,000
$101,380
$97,470
$100,000
$81,580
$80,100
$80,000
$60,000 $51,400
$40,000 $31,460
$20,000
$0
Retail Chefs and Elementary Firefighters Computer Police and Registered Software Min. Inc
Salespersons Head Cooks School Programmers Sherriff's Patrol Nurses Developers Required to
Teachers Officers (Applications) Buy a Med.
Home
SOURCE: Bureau of Labor Statistics, C.A.R. page

50
Key takeaways
• Sales bounced back but too early to tell if momentum is

sustainable
• Price set new record high but growth lowest in years, may inch
up further in coming months
• Economic and market uncertainties led to lower rates in recent
months, likely remain low in 2019
• Many still want to buy but affordability remains an issue

page
51
Where is the market data?

page
52
Housing
Matters
Podcast

page
54
Thank You
This presentation can be found on
www.car.org/marketdata
Speeches & Presentations
oscarw@car.org

2019-05 Monthly Housing Market Webinar

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California Housing

• Sales have improved… but will the momentum continue?

CALIFORNIA ASSOCIATION OF REALTORS®

SERIES: Home Purchase Sentiment Index page

SERIES: Home Purchase Sentiment Index page

27% 25% 25% 26%

SERIES: 2018/2019 Google Consumer Poll page

SERIES: Sales of Existing Single Family Homes page

SERIES: Sales of Existing Single Family Homes page

May 2019 (YTY% Chg.) Share by Price Segment

SERIES: Sales of Existing Detached Homes page

S.F. Bay -3.0% -2.7%

CALIFORNIA ASSOCIATION OF REALTORS®

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

SERIES: Sales of Existing Detached Homes page

SERIES: Sales of Existing Single Family 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.

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.

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

SERIES: Sales of Existing Detached Homes page

SERIES: Median Price of Existing Single Family Homes page

May-19 Price Growth Mortgage Pmt Growth

SERIES: Price Growth vs. Mortgage Payment Growth page

SERIES: Median Price of Existing Condo/Townhomes page

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

SERIES: Median Price of Existing Single Family 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.

SERIES: Median Price of Existing Detached Homes page

SERIES: Median Price of Existing Detached Homes page

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

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

Note: “Unsold Inventory Index” represents the number of months it would

SERIES: Active Listing of Existing Single Family Homes page

SERIES: Active Listings of Existing Single Family Homes page

SERIES: Active Listings of Existing Single Family Homes page

SERIES: Sales and Listings of Existing Single Family Homes page

CALIFORNIA ASSOCIATION OF REALTORS®

CALIFORNIA ASSOCIATION OF REALTORS®

May 2019: 134.1

SERIES: Consumer Confidence

SERIES: Consumer Confidence

SERIES: Q2 2019 Mortgage Lender Sentiment Survey page

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

CALIFORNIA ASSOCIATION OF REALTORS®

• Slow down world trade activities and

CALIFORNIA ASSOCIATION OF REALTORS®

60% US, 57%

SERIES: Housing Affordability Index of Traditional Buyers CALIFORNIA ASSOCIATION OF REALTORS®

SERIES: Housing Affordability Index of Traditional Buyers page

SOURCE: Bureau of Labor Statistics, C.A.R. page

• Sales bounced back but too early to tell if momentum is

CALIFORNIA ASSOCIATION OF REALTORS®

CALIFORNIA ASSOCIATION OF REALTORS®

CALIFORNIA ASSOCIATION OF REALTORS®

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