You may have seen recent news accounts about how home sales have slowed nationwide. So I got curious: What’s going on here?
I looked back at the local home-sales stats we publish in the Business Journal, courtesy of Redfin. And in the Valley area, home sales have indeed slowed. In fact, they were down way more here than in the rest of the country, at least in June, which is the latest reporting period.
Nationwide, sales of existing homes in June were down 2.2 percent from June of last year. But they were down 11 percent in the portion of the Valley area that’s in Los Angeles County. In Ventura County, it’s more dramatic: Home sales were down 23 percent.
That’s a huge drop off. But then I thought: Wait a minute! There’s a housing shortage here. The sharp slowdown in sales may result from the fact that there just aren’t many homes to buy.
But that supposition appears to be wrong. Home listings – the number of homes for sale – have increased over the last year. The number of unsold homes was up 1 percent in the Los Angeles County portion of the Valley area (including the San Fernando Valley and such areas as Burbank, Calabasas, Glendale, Santa Clarita and Palmdale).
Again, it’s more dramatic in Ventura County. The inventory of homes for sale in June was 3 percent higher than one year earlier.
In short, home sales were down in June while the inventory of unsold homes went up.
Can we declare that the housing shortage is over? No, but we can say that the shortage is now less severe.
Now that I think about it, this slowdown in house-buying shouldn’t be all that surprising. Mortgage interest rates have been going up, making monthly payments higher.
And have you noticed in recent months the sudden reappearance of for-sale signs? For a couple of years, for-sale signs were scarce. Whenever a home came up for sale, the broker who got the listing quickly showed it to his or her roster of home buyers, and a deal was quickly made before a sign was ever planted in the yard.
But lately, not only is there a proliferation of for-sale signs but even some open houses. Again, I don’t think we can declare the housing shortage dead. However, the buying frenzy – all-cash offers above asking price on the day the house hit the market – appears headed to the hospice.