California Property Reports
New Home Sales Boost Totals in Orange County Median Price Gains Decelerate in Inland Empire
CALIFORNIA, DECEMBER 16, 2016 – Southern California November home sales fell 2.3 percent from October but were up 19.5 percent from November 2015. Two factors contributed to the large annual gain this November. The TILA-RESPA Integrated Disclosure (TRID) rule went into effect in November 2015 depressing sales last year thus inflating year-over-year comparisons. In addition, there was an extra sale day this November relative to last contributing approximately 5.0 percent to the results.
“Part of the surprising year-over-year gain in November was due to the TILA-RESPA Integrated Disclosure (TRID) rule that went into effect in November 2015,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “TRID pushed November 2015 sales into December and thus made November 2016’s year-over-year comparison higher. The reverse may be true in December 2016.”
At the county level, sales increased from a year ago in all five Southern California counties. Sales increases ranged from 3.4 percent in Riverside to an increase of 27.2 percent in Orange County.
Southern California November 2016 Sales Trends
Southern California October-November 2016 Combined Sales Trends
“The 27.2 percent sales jump in Orange County stood out,” said Schnapp. “Part of that increase was due to the TRID effect and the extra sales day in November but digging further, we discovered that much of the uptick was due to new home sales. Orange County has seen plenty of new construction this past year. In October and November, 10 to 15 percent of sales were new single-family homes. That’s nearly double the number in 2015, but not only that, November 2016 new home sales were double October’s.”
Many factors in Southern California’s housing economy, such as employment, income, net migration, and regulatory shifts have contributed to real estate trends this year.
“From July through September 2016, rising angst over affordable housing led several Southern California communities to ban short-term rentals (STRs),” said Schnapp. “These STR bans may have contributed a temporary boost in sales in October and November as investors sold their STR properties.”
Year-to-date sales (January through November) provide insight into longer-term trends. In Southern California, year-to-date sales were essentially unchanged, up 0.1 percent relative to the same period in 2015, and have been essentially flat since 2009. At the county level, year-to-date sales inched higher in four of the five Southern California counties and fell 1.1 percent in Los Angeles County.
Southern California County Year-to-Date Sales Summary (January through November Totals)
“Southern California sales have been trending mostly sideways since 2009,” said Schnapp. “Sluggish real income growth, affordability, and lack of inventory continue to be a drag on sales. That being said, recent improvements in income growth and inventory will improve both demand and supply, all positives for a better real estate market in 2017.”
The November median home price in the region was $492,000, the highest since August 2007. Prices were up 1.4 percent from October and up 9.3 percent from November 2015. Despite recent gains, prices remain 8.0 percent below the April 2007 peak of $535,000.
At the county level, annual price increases ranged from +3.0 percent in Riverside County to +8.8 percent in Los Angeles County.
“Prices continued to march higher in all five Southern California Counties in 2016,” said Schnapp. “Price appreciation has slowed in the Inland Empire (Riverside and San Bernardino Counties) in large part due to new inventory becoming available for sale. The additional housing stock and more stable prices have provided welcome relief to buyers wanting some additional time to look for a home and make a purchase decision.
Southern California Median Price Summary by County
While the highest November median price was $730,000 in Orange County, all median home prices in the five-county region remain below their previous peaks. Orange County is 2.2 percent below its prior peak while prices in Riverside and San Bernardino counties are 23.0 and 26.1 percent below their previous highs, respectively.”
Southern California November Median Home Prices versus Prior Peak
Average annual price appreciation slowed in three of five Southern California counties. In Los Angeles, Riverside, and San Bernardino counties, average annual prices appreciation went from 7.3, 6.6, and 9.7 percent in 2015 to 7.0, 5.8, and 6.7 percent in 2016, respectively.
“If anyone statement encapsulates the housing story in 2016 it was ‘lack of inventory,’” said Schnapp. “Plentiful jobs, rising incomes, slower price appreciation, and low mortgage interest rates are all positives for the housing market. The pop in new home sales in Orange County is a hopeful sign that new inventory is finally becoming available.”
Southern California Home Sales
Southern California Home Sales – Total Single-family residence and condominium sales in the following counties: Los Angeles, Orange, Riverside, San Bernardino, San Diego. Sales are illustrated by month from 2005 to current and are divided into distressed and non-distressed sales. Distressed sales are the sum of short sales, where the home is sold for less than the amount owed, and REO sales, where banks resell homes that they took ownership of after foreclosure. All other sales are considered non-distressed.
Year-to-Date Home Sales (January through November)
Southern California Year-to-Date Home Sales – The sum of year-to-date sales of single-family residences and condominiums for the current year and prior years divided into distressed and non-distressed sales.
Southern California Median Sales Price
Southern California Median Sales Price –October median sales prices of a Southern California single-family home and the median sales price of homes within the individual counties in the region.
Real Property Report Methodology
California real estate data presented by PropertyRadar, including analysis, charts, and graphs, is based upon public county records and daily trustee sale (foreclosure auction) results. Items are reported as of the date the event occurred or was recorded with the California County. If a county has not reported complete data by the publication date, we may estimate the missing data, though only if the missing data is believed to be 10 percent or less of all reported data.