Full impact of coronavirus pandemic hits California housing market in May, C.A.R. reports
– Existing, single-family home sales totaled 238,740 in May on a seasonally adjusted annualized rate, down 13.9 percent from April and down 41.4 percent from May 2019.
– May’s statewide median home price was $588,070, down 3.0 percent from April and down 3.7 percent from May 2019.
– Year-to-date statewide home sales were down 12.9 percent in May.
this home has been completely remodeled. 4 bedrooms 2.5 bathrooms. $649,000. loans a 2.76%
Processed with VSCO with preset
Today is a little different than yesterday. While doing Real Estate deals. My email from the National Association of Real Estate is predicting a wave of foreclosures. Why? Unemployment benifits to expire. First the renters will go, then the properties. This is interesting. Each city must build high rise buildings to house people. So in the future of America to look like the past of Poland? It’s any ones guess what the future will be? Have a blessed day. Full of love and graditude. PMRE Brokers. We are all in this together!
Become Big Deals!
Throught this whole pandemic, which began mid March, I have time to be with my thoughts.
Read fun and interesting books. Made a GREAT friend! This has been a very powerful and nessecary process. Who doesn’t like to be scared?
EXACTLY!
Many projects do add value to your home, and improve your family’s quality of life. By working on these projects now, you can enjoy the benefits and updates. If you make green upgrades, then you can also start recouping your investment in these green energy technologies once you complete the projects.
Some home improvement projects that add value to a home include:
Most people consider the kitchen to be the heart of the home, and because of this, updates in this room pay off. According to HGTV, you can expect to recoup 60%-120% of your investment on a kitchen remodel, as long as you don’t go overboard. You should never make your kitchen fancier than the rest of the house, or the neighborhood.
Why You Shouldn’t Invest in a Deluxe Kitchen
For example, a historic home in my neighborhood has been on the market for more than two years. During the owner’s last open house, I went in to check it out, and immediately saw why the house hasn’t sold. The quaint Arts and Crafts style home was built in 1900 and has a lot of charm. Unfortunately, the homeowners had invested over $60,000 upgrading the kitchen.
The enormous kitchen, easily the size of the living room, features appliances and countertops that might look more at home in a fancy restaurant kitchen. The style, size, and quality of the kitchen don’t fit in with the rest of the house, or the neighborhood. If you plan on selling your home within the next five years, keep potential buyers in mind before you start on any major remodel; many people won’t pay for a fancy, deluxe kitchen.
A Little Paint Goes a Long Way
When it comes to how much you spend on a kitchen remodel, prices can run the gamut, from $5,000 to $75,000, or more. Get the biggest bang for your buck on a kitchen remodel by looking at color. Fresh paint, in modern colors, can go a long way towards updating the look of your kitchen. Plus, paint is relatively cheap.
You might want to consider using low-VOC paint; this makes your kitchen more eco-friendly, and helps your family avoid breathing in dangerous chemicals, like benzene, that off-gas from regular fresh paint.
Energy-Efficient Appliances
Replace old appliances with energy-efficient models. Energy Star-rated appliances are better for the environment, and they also help you save money, because they use less energy. Potential buyers often look for ways to save money when shopping for a new home.
If you’re looking upgrade your appliances to save energy, learn more about the the best time of year to buy large appliances.
Home sales volume remains low, as does job creation. Residential construction of all types continues to struggle in this region, leaving would-be homebuyers wanting for more.
As the next recession looms on the horizon — expected in 2020 — forward-looking agents will prepare for the slowdown in sales and prices to continue here in Orange County and across the state. The next 30 years are going to be an about-face of the past 30 years of repetitively declining mortgage rates. Homebuyers will face the pressure of these rising rates in the coming years, though a brief reprieve is to be had in 2019-2020 as the Federal Reserve allows rates to cool in preparation for the next recession.
View the Orange County regional charts below for details on current activity and forecasts for its local housing market.
Updated September 1, 2019. Original copy posted March 2013.
Chart update 09/01/19
| 2018 | 2017 | 2016 | 2003: Peak Year | |
| Orange County home sales volume | 35,100 | 38,400 | 37,900 | 53,900 |
*first tuesday’s projection is based on monthly sales volume trends, as experienced so far this year.
Home sales volume in Orange County remains weak and somewhat stuck at just over half the heights seen during the Millennium Boom. Echoing state trends, Orange County saw a decrease in total home sales volume in 2018, ending the year 9% lower than in 2017. Worse, year-to-date home sales are 13% below 2018 as of Q2 2019.
A sharp bounce in home pricing following the speculator interference of 2012-2014 has held sales volume back from any significant increases. Buyers’ incomes, already insufficient to keep up with quickly rising home prices, were further decimated in 2018 as mortgage interest rates increased.
In review, 2009-2010 Orange County sales volume rose slightly with the introduction of the housing tax credit, falling back in 2011 for lack of end user demand. From the latter half of 2012 through most of 2013, speculator hyper-activity bumped sales volume artificially yet again, as it did in all of California. The speculator buying wave has since receded.
Looking forward, a complete recovery with annual sales volume of around 46,000 in Orange County will be reached only afterend user demand is buttressed by labor force participation and normalized job levels, expected in the 2021-2023 recovery period following the next recession, anticipated by economists to arrive around 2020.
Chart update 03/06/19
| 2017 | 2016 | 2015 | |
| Orange County homeowner turnover rate | 6.8% | 6.7% | 7.3% |
| Orange County renter turnover rate | 17.8% | 18.5% | 20.0% |
Without turnover, homes do not sell. The homeowner turnover rate in Orange County has remained mostly level since the end of the recession in 2009. The renter turnover rate has declined since 2010 and was at 17.8% in 2017, the most recently reported Census year.
Renters rose at a more gradual pace in 2018, following years of escalating rents and declining rental vacancies. Homeowners are likewise struggling to compete with other homebuyers for a shrunken inventory of homes for sale, meaning the turnover rate remains relatively low today.
Turnover rates are likely to rise dramatically in the convergent 2021-2022 boomlet period raising rental vacancy rates. Then, members of Generation Y (Gen Y) will collectively rush to buy and Baby Boomers (Boomers) will retire en masse, selling and mostly buying replacement homes. International and domestic emigration into California will also play a significant role in suburban housing demand.
Chart update 03/06/19
| 2017 | 2015 | 2014 | |
| Orange County homeownership | 57.4% | 56.7% | 56.6% |
Orange County’s homeownership rate has fallen since its 2007 peak of 62.7%. The most recent homeownership data shows a 57.4% homeownership rate in Orange County. Statewide homeownership has historically been about two percentage points below Orange County’s. The state average is currently 55%, thus homeownership reports in Orange County in 2017 will likely remain around 57%.
Expect Orange County’s homeownership rate to remain at its present low level until 2021-2023, when the housing market will bounce back from the recession expected in 2020. Only with the return of jobs, higher wages and increased confidence will the first-time homebuyer population gain traction.
However, don’t expect the rate of homeownership to fully return to the inflated heights seen in 2007 anytime soon. This rate was elevated by unfettered access to easy money, which mortgage regulators tamped down in 2014 with enforcement of ability-to-pay (ATR) rules to protect society from certain destabilizing types of mortgage lending. These rules limit mortgage funding to those homebuyers with the financial ability to actually repay their debts.
Thus, the housing market won’t see a repeat of those Millennium Boom homebuyers who lacked the proper finances. Though this translates to a slightly lower homeownership rate in the near term, it fosters a more stable future housing market in Orange County and the state. The shift of Gen Y to rentals for a longer period before buying a home than in past generations also puts a cap on home sales volume.
Chart update 09/01/19
| 2018 | 2017 | 2016 | |
| Orange County single family residential (SFR) starts | 4,500 | 4,800 | 4,300 |
| Orange County multi-family starts | 3,900 | 4,800 | 7,700 |
The recovery picture is mixed for Orange County residential construction. After years of increased single family residential (SFR) construction starts, 2018 saw a decrease in the number of new SFRs started. In total, 19% fewer SFR starts occurred in 2018 compared to the previous year.
Multi-family starts in Orange County totaled 4,500 in 2018, decreasing about 6% from the previous year and continuing to fall in 2019. This downward trend in starts will likely reverse in the coming years, as legislative moves focus on adding more housing for the ever-growing resident population.
On the other hand, don’t expect SFR construction to recover fully anytime soon. The next peak in SFR construction starts will likely occur in 2021-2023 as renters shift to becoming homeowners following a statewide-push for more construction. Even then, SFR starts are unlikely to return to the mortgage-driven numbers seen during the hyperactive Millennium Boom.
Chart update 09/01/19
| Jun 2019 | Jun 2018 | annual change | |
| Orange County jobs | 1,673,100 | 1,631,200 | +2.6% |
California regained all jobs lost at the end of 2014, but Orange County didn’t catch up until the last quarter of 2015. While total job numbers actually declined in 2018, the number of employed individuals in Orange County is 2.6% above a year earlier as of June 2019, still just 124,100 above the number of jobs held before the recession. However, since Orange County’s population has grown significantly since jobs previously peaked in 2006, the real recovery is still further down the line.
As seen in Figure 9, job additions have been one-third slower to come about during this recovery compared to the 2000s recovery, and at half the pace of the 1990s recovery, echoing the secular stagnation of the 1930s. When will all of these jobs catch up with Orange County’s continuously growing population?
Orange County will likely catch up in 2020, just in time for the housing market to hit a major obstacle as economic factors set up for the next recession, expected by forecasters to arrive in 2020. These factors include the mitigating effect on home sales and the jobs market of increased mortgage interest rates, which began in 2018.
Chart update 09/01/19
| Jun 2019 | Jun 2018 | annual change | |
| Construction | 109,100 | 104,500 | +4.4% |
| Real Estate | 39,800 | 39,200 | +1.5% |
The number of individuals employed in the real estate and construction industries fell during the recession, beginning to show mixed improvement in 2012. While the number of real estate professionals is now level with pre-recession levels, construction workers are still well below their Millennium Boom peak, and declining going into 2019. Jobs numbers in both of these industries will likely stall in 2019-2020, as sales slow and construction struggles to gain momentum.
Chart update 03/06/19
| 2017 | 2016 | Annual change | |
| Orange County per capita income | $65,400 | $62,763 | +4.2% |
| California per capita income | $59,796 | $57,497 | +4.0% |
The average income earner in Orange County made $65,400 in 2017 (the most recently reported data from the Bureau of Economic Analysis).
Sustainable home price increases (not driven by cash-heavy investors or market momentum) are limited to a ceiling set by personal income, the annual rate of increase from 2016 to 2017 in this region being 4.2%. These annual income and price increases will remain low until an optimal employment level is attained with a full jobs recovery for the 10%+ population growth since 2007. Orange County will likely achieve these job numbers in 2020. Meanwhile, price increases will remain low since homebuyer occupants ultimately determine selling prices — they can only pay as much for a home (or rent) as their savings and income qualify them to pay — nothing more for a sustained period of time.
However, per capita income increases will likely slow somewhat in 2020-2021 following the 2020 recession. This, along with higher interest rates, will hold back home sales in the next few years. Look to 2021-2023 for the next significant increase in home sales volume and prices. This period will be driven by the shifting demographic trends of retiring Baby Boomers and their Gen Y children who will become homebuyers en masse following the next recession.
SHARE:PREVIOUSSacramento County housing indicatorsNEXTLos Angeles housing indicators
is the writing staff comprised of legal editor Fred Crane, writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Carrie B. Reyes, Benjamin J. Smith, Oscar Alvarez and graphic designer Mary LaRochelle.
February 24, 2014
Home sales volume remains low, as does job creation. Residential construction of all types continues to struggle in this region, leaving would-be homebuyers wanting for more.
As the next recession looms on the horizon — expected in 2020 — forward-looking agents will prepare for the slowdown in sales and prices to continue here in Orange County and across the state. The next 30 years are going to be an about-face of the past 30 years of repetitively declining mortgage rates. Homebuyers will face the pressure of these rising rates in the coming years, though a brief reprieve is to be had in 2019-2020 as the Federal Reserve allows rates to cool in preparation for the next recession.
View the Orange County regional charts below for details on current activity and forecasts for its local housing market.
Updated September 1, 2019. Original copy posted March 2013.
Chart update 09/01/19
| 2018 | 2017 | 2016 | 2003: Peak Year | |
| Orange County home sales volume | 35,100 | 38,400 | 37,900 | 53,900 |
*first tuesday’s projection is based on monthly sales volume trends, as experienced so far this year.
Home sales volume in Orange County remains weak and somewhat stuck at just over half the heights seen during the Millennium Boom. Echoing state trends, Orange County saw a decrease in total home sales volume in 2018, ending the year 9% lower than in 2017. Worse, year-to-date home sales are 13% below 2018 as of Q2 2019.
A sharp bounce in home pricing following the speculator interference of 2012-2014 has held sales volume back from any significant increases. Buyers’ incomes, already insufficient to keep up with quickly rising home prices, were further decimated in 2018 as mortgage interest rates increased.
In review, 2009-2010 Orange County sales volume rose slightly with the introduction of the housing tax credit, falling back in 2011 for lack of end user demand. From the latter half of 2012 through most of 2013, speculator hyper-activity bumped sales volume artificially yet again, as it did in all of California. The speculator buying wave has since receded.
Looking forward, a complete recovery with annual sales volume of around 46,000 in Orange County will be reached only afterend user demand is buttressed by labor force participation and normalized job levels, expected in the 2021-2023 recovery period following the next recession, anticipated by economists to arrive around 2020.
Chart update 03/06/19
| 2017 | 2016 | 2015 | |
| Orange County homeowner turnover rate | 6.8% | 6.7% | 7.3% |
| Orange County renter turnover rate | 17.8% | 18.5% | 20.0% |
Without turnover, homes do not sell. The homeowner turnover rate in Orange County has remained mostly level since the end of the recession in 2009. The renter turnover rate has declined since 2010 and was at 17.8% in 2017, the most recently reported Census year.
Renters rose at a more gradual pace in 2018, following years of escalating rents and declining rental vacancies. Homeowners are likewise struggling to compete with other homebuyers for a shrunken inventory of homes for sale, meaning the turnover rate remains relatively low today.
Turnover rates are likely to rise dramatically in the convergent 2021-2022 boomlet period raising rental vacancy rates. Then, members of Generation Y (Gen Y) will collectively rush to buy and Baby Boomers (Boomers) will retire en masse, selling and mostly buying replacement homes. International and domestic emigration into California will also play a significant role in suburban housing demand.
Chart update 03/06/19
| 2017 | 2015 | 2014 | |
| Orange County homeownership | 57.4% | 56.7% | 56.6% |
Orange County’s homeownership rate has fallen since its 2007 peak of 62.7%. The most recent homeownership data shows a 57.4% homeownership rate in Orange County. Statewide homeownership has historically been about two percentage points below Orange County’s. The state average is currently 55%, thus homeownership reports in Orange County in 2017 will likely remain around 57%.
Expect Orange County’s homeownership rate to remain at its present low level until 2021-2023, when the housing market will bounce back from the recession expected in 2020. Only with the return of jobs, higher wages and increased confidence will the first-time homebuyer population gain traction.
However, don’t expect the rate of homeownership to fully return to the inflated heights seen in 2007 anytime soon. This rate was elevated by unfettered access to easy money, which mortgage regulators tamped down in 2014 with enforcement of ability-to-pay (ATR) rules to protect society from certain destabilizing types of mortgage lending. These rules limit mortgage funding to those homebuyers with the financial ability to actually repay their debts.
Thus, the housing market won’t see a repeat of those Millennium Boom homebuyers who lacked the proper finances. Though this translates to a slightly lower homeownership rate in the near term, it fosters a more stable future housing market in Orange County and the state. The shift of Gen Y to rentals for a longer period before buying a home than in past generations also puts a cap on home sales volume.
Chart update 09/01/19
| 2018 | 2017 | 2016 | |
| Orange County single family residential (SFR) starts | 4,500 | 4,800 | 4,300 |
| Orange County multi-family starts | 3,900 | 4,800 | 7,700 |
The recovery picture is mixed for Orange County residential construction. After years of increased single family residential (SFR) construction starts, 2018 saw a decrease in the number of new SFRs started. In total, 19% fewer SFR starts occurred in 2018 compared to the previous year.
Multi-family starts in Orange County totaled 4,500 in 2018, decreasing about 6% from the previous year and continuing to fall in 2019. This downward trend in starts will likely reverse in the coming years, as legislative moves focus on adding more housing for the ever-growing resident population.
On the other hand, don’t expect SFR construction to recover fully anytime soon. The next peak in SFR construction starts will likely occur in 2021-2023 as renters shift to becoming homeowners following a statewide-push for more construction. Even then, SFR starts are unlikely to return to the mortgage-driven numbers seen during the hyperactive Millennium Boom.
Chart update 09/01/19
| Jun 2019 | Jun 2018 | annual change | |
| Orange County jobs | 1,673,100 | 1,631,200 | +2.6% |
California regained all jobs lost at the end of 2014, but Orange County didn’t catch up until the last quarter of 2015. While total job numbers actually declined in 2018, the number of employed individuals in Orange County is 2.6% above a year earlier as of June 2019, still just 124,100 above the number of jobs held before the recession. However, since Orange County’s population has grown significantly since jobs previously peaked in 2006, the real recovery is still further down the line.
As seen in Figure 9, job additions have been one-third slower to come about during this recovery compared to the 2000s recovery, and at half the pace of the 1990s recovery, echoing the secular stagnation of the 1930s. When will all of these jobs catch up with Orange County’s continuously growing population?
Orange County will likely catch up in 2020, just in time for the housing market to hit a major obstacle as economic factors set up for the next recession, expected by forecasters to arrive in 2020. These factors include the mitigating effect on home sales and the jobs market of increased mortgage interest rates, which began in 2018.
Chart update 09/01/19
| Jun 2019 | Jun 2018 | annual change | |
| Construction | 109,100 | 104,500 | +4.4% |
| Real Estate | 39,800 | 39,200 | +1.5% |
The number of individuals employed in the real estate and construction industries fell during the recession, beginning to show mixed improvement in 2012. While the number of real estate professionals is now level with pre-recession levels, construction workers are still well below their Millennium Boom peak, and declining going into 2019. Jobs numbers in both of these industries will likely stall in 2019-2020, as sales slow and construction struggles to gain momentum.
Chart update 03/06/19
| 2017 | 2016 | Annual change | |
| Orange County per capita income | $65,400 | $62,763 | +4.2% |
| California per capita income | $59,796 | $57,497 | +4.0% |
The average income earner in Orange County made $65,400 in 2017 (the most recently reported data from the Bureau of Economic Analysis).
Sustainable home price increases (not driven by cash-heavy investors or market momentum) are limited to a ceiling set by personal income, the annual rate of increase from 2016 to 2017 in this region being 4.2%. These annual income and price increases will remain low until an optimal employment level is attained with a full jobs recovery for the 10%+ population growth since 2007. Orange County will likely achieve these job numbers in 2020. Meanwhile, price increases will remain low since homebuyer occupants ultimately determine selling prices — they can only pay as much for a home (or rent) as their savings and income qualify them to pay — nothing more for a sustained period of time.
However, per capita income increases will likely slow somewhat in 2020-2021 following the 2020 recession. This, along with higher interest rates, will hold back home sales in the next few years. Look to 2021-2023 for the next significant increase in home sales volume and prices. This period will be driven by the shifting demographic trends of retiring Baby Boomers and their Gen Y children who will become homebuyers en masse following the next recession.
SHARE:PREVIOUSSacramento County housing indicatorsNEXTLos Angeles housing indicators
is the writing staff comprised of legal editor Fred Crane, writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Carrie B. Reyes, Benjamin J. Smith, Oscar Alvarez and graphic designer Mary LaRochelle.
February 24, 2014
pay interest on car loans, credit card balances and mortgages. They earn interest, at least a little, on the money they save with banks.
Technically speaking, Federal Reserve officials did not touch any of those rates when they announced a quarter-point interest-rate cut on Wednesday, the first cut in a decade. The rate they reduced is the federal funds rate, which is what banks and other financial institutions charge one another for very short-term borrowing.
Most consumers don’t do that sort of overnight borrowing, but the Fed’s moves still affect the borrowing and saving rates they encounter every day.
The effect is not always direct or immediate, so consumers probably will not wake up on Thursday to find that all of their favorite rates have changed by a quarter of a point. There is even solid evidence that the mere expectation that the Fed would cut rates on Wednesday had already pushed down some of the key rates that consumers pay.
Read more at Gardening Know How: Backyard Garden Chickens: Tips On Raising Chickens In Your Garden https://www.gardeningknowhow.com/garden-how-to/beneficial/backyard-garden-chickens.htm
