The California Association or Realtors (CAR) just posted some Dismal Statistics.
- The California housing market posted its largest year-over-year sales decline since March 2014 and remained below the 400,000-level sales benchmark for the second consecutive month in September, indicating that the market is slowing as many potential buyers put their homeownership plans on hold.
- Existing, single-family home sales totaled 382,550 in September on a seasonally adjusted annualized rate, down 4.3 percent from August and down 12.4 percent from September 2017.
- September’s statewide median home price was $578,850, down 2.9 percent from August but up 4.2 percent from September 2017.
- Statewide active listings rose for the sixth consecutive month, increasing 20.4 percent from the previous year.
- Inventory reached the highest level in 31 months, with the Unsold Inventory Index reaching 4.2 months in September.
- September year-to-date sales were down 3.3 percent.
- Tax reform, which increases the cost of homeownership, also is contributing to the decline, especially in high-cost areas such as the San Francisco Bay Area and Orange County.
Inventory Rising Fast
That image thanks to [Calculated Risk](https://www.calculatedriskblog.com/2018/10/california-california-housing-market.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed:+CalculatedRisk+(Calculated+Risk%29).
Inventory up 20%. What’s the problem?
The same problem as down under: Supply of Homes on Australia Market Soars Rapidly, Major Crash Coming
Goodbye California, Hello Boise
Sky-high housing prices in the Golden State bring an echo boom—and new neighbors—to other Western states.
Bloomberg notes Boise and Reno Capitalize on the California Real Estate Exodus
Affordable Migration
Also, please consider my article Affordable Migration: Goodbye Chicago, New York, LA – Hello 5 Cities in Texas
Even liberals have finally had enough of California, Illinois, and New York.
Related Housing Articles
- Thud! Sept New Home Sales Plunge 5.5% from Dramatically Revised Lower August
- Housing Continues to Weaken: Starts Decline 5.3%, Permits Down 0.6%
Mike “Mish” Shedlock
Booms always turn into busts. Housing prices never go up forever and factor into the equation record mortgage debt and you have a recipe for disaster. The ghosts of 2008 are beginning to show themselves.
Please stay OUT of RENO,NV. It’s already starting to get “Californicated”.
You guys are toast! That’s like expecting Katrina victims to stay out of Texas…..
A more proper culture: Gunracks in every middle and above school for kids to leave their plinkers while in class; beltguns on the back of every pickup; a state constitution explicitly barring all and any activity taxation for all posterity; no room for any civil lawsuit against anyone not first criminally indicted, tried and found guilty by a jury of peers; and no zoning, land use nor other pull-up-the-ladder nonsense of the California kind; would go a long way towards turning the worst of the dregs away at the border. But, I don’t have that much faith in you…. So, toast you are.
And please not NYC or the Boston area. Both have become overrun with these children of the 1% from California. They are also some of the fakest acting,most passive aggressive individuals I have ever met and their sense of entitlement is sickeningly pathological
In addition to high price/income and rising mortgage rates, tax reform added significantly to the monthly cost of home ownership. Check the numbers!
$700 a month is less than what people spend eating out in a month. Stop eating dinner out every night and cut out the twice a day Starbucks latte habit and you will easily have $700 extra dollars a month. People stop feeling sorry for individuals who have no sense of person responsibility
Housing prices will come down to more affordable levels and this will stoke demand. I don’t see this as apocalyptic. Just a normal correction. As long as high paying jobs exist in Ca, there will be demand for housing.
Housing is no different than any other good: The cheaper it gets, the better. High prices are a function of scarcity. The less scarcity, the more wealth.
A much bigger problem is that an outsized, and growing for the past 50 years, share of the high paying jobs California has, only exist, at all, in order to pilfer percentages off of the artificially created and sustained bubble in asset prices that also engulfs housing. IOW, the jobs pay plenty, but create no value. No different than work as a bank robber. Hence, once the artificially wealth, productivity and competitiveness destroying bubble recedes, many of the high paying jobs goes right alongside it.
California does have more proper industries, that are productive, and do create value backing the high salaries they pay. But even in places like Silicon Valley, the ratio of meaningful inventors and creators, to “investors,” brokers and other leeching dilettantes, have fallen like a rock for decades.
While Hollywood is struggling with the problem that America and Americans are no longer a place and people anyone else cares enough about to bother watching anymore. Cultural exports only really works for cultures that retain some aspirational qualities, after all.
Texas is becoming what California use to be. Give it another election cycle or two and the rampant growth Texas is experiencing will be unmanageable. The reason booms dont go on forever is because there is an upper bound on growth that crimps the quality of life. I’m happy people are leaving California as it will only help the state manage its growth better. Texas and other growth heavy states will soon realize the limits and side effects of rampant growth. When this boom goes bust real estate across the country will go back to 2% growth in value per year. The bigger problems around the country will manifest themselves at state and local governments.
Victor Davis Hanson explains California better than anyone.
Seems as WA follows …
And he nails it in the parting remarks…”They’re not very liberal at all.” The folks ruining CA are the same ones ruining the rest of the country. You have a subset of predatory capitalists who have insulated themselves from the consequences of the ideology they supposedly support. That subset includes both DemocRats and Rethuglicans. Not hard to understand. Just follow the money in this new neofeudal Game of Thrones economy.
This demise of California theme reminds me of Yogi Berra’s quote: “Nobody goes there anymore, it’s too crowded”.
with illegals? I don’t remember that part of the quote.
And yet they will move to “red” republican, low tax, low regulation, men should pee in men’s bathrooms, pro-Constitution, pro 2nd Amendment, right to work, non-sanctuary city, etc. states and RUIN THEM.
You would think liberals/progressives would learn that their values and beliefs DESTROYED where then lived. And change.
But, like parasites, when they discover the host they infect is dying, they move to a new host.
And start the cycle again…
++++++
“Even liberals have finally had enough of California, Illinois, and New York.”
I just wish they’d leave their tax and tax and tax politics in California instead of trying to ruin Colorado too.
They already ruined CO. CO used to be a conservative state not so long ago. They are also ruining WA and ID is next, Even TX is becoming purple. NY, NJ, MA liberal locusts are infecting NC and FL. The liberal locusts will flee their trashed bankrupted states to soon destroy their next destination with their failed ideology.
Maybe rampant uncontrolled booms followed by busts are the problem. The people get the government they deserve in the aggregate. Until a system that isnt structurally flawed is created and budgets are indexed to rates of growth and similar measures then nothing will fundamentally change. The ideology isnt the problem. Governments have multiple crises to deal with in the next 10 years. Promises were made that cant be kept. Monies were paid into the system that wont be paid back. This is why this boom will go bust for good. There is no political will to solve problems anymore.
Mish, your website is really F’d up. I want to click on an article but instead a tic-tac-toe mishmash of ads pops up. I’m going to Peter Schiff instead.
Goodbye