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Southern California homebuying hit record low in May

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By | and | | Orange County RegisterThis coronavirus lockdown chopped Southern California home sales in half last month, resulting in a record-low May tally after the doors slammed shut on one of the most promising spring selling seasons in years.But agents and market watchers say the worst may be over, with sales starting to revive andrecord-low mortgage rates drawing buyers back into the market to compete for a paltry number of homes for sale.“For three weeks, maybe a month, buyers were canceling escrows. Escrows fell apart at the last minute with loans approved,” Ray Millman, a longtime Torrance agent, said of the market at the height of the shutdown. “But now, the market is at ‘hot’ again.”The depth of that pandemic panic is reflected in new numbers released Thursday, June 18, showing closed deals plummeted 45% in May — the fourth-biggest year-over-year drop on record.A total of 12,271 new and existing homes changed hands in the six-county region last month, the lowest number for a May and the third-lowest for any month in the last three decades, according to DQ News/CoreLogic.By comparison, the region averaged more than 25,000 transactions in May for the past 32 years.May’s dramatic sales declines “reflect contract signings from April, when the housing market came to a virtual standstill due to COVID-19,” said CoreLogic Deputy Chief Economist Selma Hepp. “But despite slower sales, home prices continued to show resiliency and increased in most parts of Southern California.”Home prices actually increased during the lockdown.The median price of a Southern California home, or price at the midpoint of all sales, increased 2.7% to $540,000 last month, CoreLogic figures show. That’s just $10,000 shy of the all-time high.A north San Bernardino home Brandon Rivinius sold in mid-May illustrates how the coronavirus disrupted the market.A buyer agreed in March to pay $408,000 for the three-bedroom home, said Rivinius, broker-owner of Reliable Realty Group in Loma Linda and the seller’s agent. Then the stock market crashed, leaving the buyer $20,000 short for his down payment.“But he really liked the house,” Rivinius said. “So, we renegotiated.”The seller dropped the price $8,000 and agreed to pay $5,000 of the buyer’s closing costs.“We ended up closing the deal,” Rivinius said.Record-low mortgage rates lured buyers back into the market.Freddie Mac said Thursday the average rate for a 30-year fixed mortgage dropped to 3.13%, the lowest rate in at least a half-century. With rates in the low 3% range for three months, U.S. home-purchase loan applications reached an 11-year high last week, the Mortgage Bankers Association reported Wednesday.“That’s really keeping us alive,” Michelle Harrington, broker and chief operating officer for Irvine-based First Team Real Estate, said of interest rates.Harrington said First Team’s pending sales are up 16% this month from June 2019.“We’re seeing a real huge recovery in the second half (of the year),” Harrington said. “The problem is we don’t have that much inventory, so … it’s turning a seller’s market.”As of June 11, for-sale listings dropped to just over 31,000 homes, or a third lower than a year ago, according to Reports On Housing.“The all-time record low mortgage rates are stoking the fires of demand,” Reports On Housing author Steve Thomas wrote Monday. “And, the active listing inventory is at its lowest level for a June since 2013.”California Association of Realtors Deputy Chief Economist Jordan Levine concurred May’s closed-sale numbers reflect the bottom of the pandemic pullback. But full recovery, he said, likely won’t occur until the second half of 2021.This year likely will end with both a 10-12% drop in home sales compared with 2019 and a 2-3% drop in prices, CAR predicts. And a normal market could be a ways off.“It’s going to take several months, not several weeks,” Levine said. “The economy will continue to open up, but there’s been a lot of damage done in terms of job loss.”Here are several more key trends from CoreLogic’s latest housing report:1. Single-family houses: 8,593 sold in the six counties, down 45.5% in a year. The median price was $565,000 — a 2.4% increase over 12 months.2. Condos: 2,277 sales across the region, down 53.1% over 12 months. The median price was $450,000 — flat from the year before..3. Newly built: Local builders sold 1,401 new homes, down 18.3% from a year ago. The median price was $545,500 — a 2.5% increase over 12 months.4. Builder share: New homes accounted for 11.4% of SoCal sales, compared with 7.7% a year earlier. By comparison, existing home resales fell 47%, more than double the new-home sales drop. Since new-home deals often take longer than resales, many new home contracts likely reflect contracts signed months before the COVID lockdown.5. Los Angeles County: Sales fell 49.5% to 3,597 transactions. The median price was $620,000, up 1.6%.6. Orange County: Sales were down 50.6% to 1,635 transactions. The median price was SoCal’s highest at $750,000, up 4.2%.7. Riverside County: Sales fell 43.7% to 2,394 transactions. The median price was $415,000, up 6.5%.8. San Bernardino County: Sales fell 33.9% — the smallest decline in the region — to 1,828 transactions. The median price was SoCal’s cheapest at $368,000, up 6.7%.9. San Diego County: Sales were down 40.7% to 2,327 transactions. The median price was $590,000, up 3.5%.10. Ventura County: Sales fell 49.4% to 490 transactions. The median price was $580,000, dropping 1.7%.We invite you to use our commenting platform to engage in insightful conversations about issues in our community. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable to us, and to disclose any information necessary to satisfy the law, regulation, or government request. We might permanently block any user who abuses these conditions.Get the latest news delivered daily!Follow UsMost PopularClose

By | and | | Orange County RegisterThis coronavirus lockdown chopped Southern California home sales in half last month, resulting in a record-low May tally after the doors slammed shut on one of the most promising spring selling seasons in years.But agents and market watchers say the worst may be over, with sales starting to revive andrecord-low mortgage rates drawing buyers back into the market to compete for a paltry number of homes for sale.“For three weeks, maybe a month, buyers were canceling escrows. Escrows fell apart at the last minute with loans approved,” Ray Millman, a longtime...

Southern California homebuying hit record low in May

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