Discounts Available – Orange County Register
“Crash, Correction or Chill” looks at economic and real estate trends that offer clues as to how deep the housing problems could be.
To hum: California home-seekers should be slightly encouraged that prices in three major markets are a long way from their spring peaks — although property values are still fairly inflated since pre-pandemic times.
Source: My trusty spreadsheet reviewed Case-Shiller’s November home price indices, which track 20 major US markets, including three in California. It’s a widely followed benchmark that essentially represents a three-month average of values. This benchmark compares pricing from the sale of individual existing single-family homes to measures such as those that track median selling prices.
Case-Shiller confirms that there are bargains available throughout California that bring modest relief to those on a tight budget who dream of owning their own home.
San Francisco prices are the most underperforming of the 20 cities covered by this calculation.
Bay Area values have fallen 14% since May 2022 and are down 2% over 12 months — the only annual loss among the 20. Prices are at a 17-month low, but there’s still one over three years 26% gain.
San Diego saw the third-biggest price decline — 10% down from May’s all-time high but up 5% over 12 months. November prices were the cheapest in 10 months, but buyers are moving in a market that has returned 46% in three years.
And in Los Angeles and Orange counties, prices are down 7% from May’s high — drop #6. Prices fell to a nine-month low. but 4% higher over 12 months and 36% higher over three years.
The other challenge facing the home seeker is the rise in mortgage interest rates over the last year. The historically cheap money that inflated values during the pandemic era became history.
Rates rose from 3.45% in early 2022, rising to 6.9% in October, effectively reducing borrowing power. As a result, affordability issues pushed single-family home purchases in California to a 16-year low, according to an index by the California Association of Realtors.
Now there was some interest rate relief through January as home loan rates fell to 6.27%. Does that create more “affordability” – or does it simply firm up prices? That remains to be seen.
Crash, correction or chill?
What do price patterns say about the next turn for the apartment hunt…
Crash? This argument would focus on August through November, when all 20 US markets posted month-on-month losses. Before that, since 1991, there had been only 13 general declines.
And the last time there was a lengthy run of bad luck like this was the six months that ended in February 2009. You know, back when the Great Recession bubble burst.
Or just a correction? Look at CoreLogic’s December local median selling prices and you’ll see that LA prices are 10% off their April peak and OC prices are 11% off their May high.
Attention, house seekers; There were additional discounts until at least the end of the year!
just a cold? Yes, the Case-Shiller 20-city composite index shows U.S. house prices are down 5% from their June 2022 peak. But the 20-city cluster is still 7% up on November 2021.
And US prices are 38% higher than what was paid three years ago.
The other 17 market results, sorted by decline from their price peaks…
Seattle: Down 13% from the May peak but up 1% over 12 months. 3 years? 41% profit.
Phoenix: 8% down from June but up 6% over 12 months. 3 years? 60% profit.
Denver: Down 7% from May but up 6% over 12 months. 3 years? 38% profit.
Las Vegas: 7% down from July but up 7% over 12 months. 3 years? 43% profit.
Dallas: 7% down from June but up 11% over 12 months. 3 years? 49% profit.
Portland: 6% down from May but up 4% over 12 months. 3 years? 34% profit.
Boston: 5% down from June but up 7% over 12 months. 3 years? 34% profit.
Washington: 4% down from May but up 5% over 12 months. 3 years? 27% profit.
Minneapolis: 3% down from June but up 5% over 12 months. 3 years? 27% profit.
Detroit: 3% down from June but up 6% over 12 months. 3 years? 32% profit.
Charlotte: 3% down from July but up 13% over 12 months. 3 years? 51% profit.
Tampa: 3% down from July but up 17% over 12 months. 3 years? 65% profit.
Cleveland: Down 2% from July but up 7% over 12 months. 3 years? 34% profit.
Atlanta: Down 2% from July but up 13% over 12 months. 3 years? 47% profit.
Miami: Down 2% from peak in July 2022, but up 18% over 12 months. 3 years? 62% profit.
Chicago: Down 2% from peak in July 2022, but up 8% over 12 months. 3 years? 28% profit.
New York: Down 2% from peak in July 2022, but up 8% over 12 months. 3 years? 34% profit.
Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at firstname.lastname@example.org
https://www.ocregister.com/2023/01/31/good-news-california-house-hunters-discounts-available/ Discounts Available – Orange County Register