California Housing Market Analysis
California Housing Market Stays Resilient Amidst Rising Rates and Inventory Shortage
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Key highlights
- Federal Reserve raises the Fed Funds Rate, marking a significant shift in monetary policy.
- California’s housing market shows stability, maintaining approximately 280,000 sales over the recent months.
- Despite economic uncertainties, consumer confidence reached a two-year high in July.
- The housing inventory shortage persists as a significant hurdle to a more vigorous recovery in home sales.
In a critical decision, the Federal Reserve’s FOMC members have voted for a 25 basis-point increase in the Fed Funds Rate, marking a noteworthy shift in monetary policy. Notwithstanding the backdrop of uncertainty, the economy demonstrates resilience, evident in consistent job growth and robust economic indicators. However, the increased rates and decreasing bond prices may affect purchasing power of potential homeowners. California’s housing market shows stability, with nearly 280,000 sales maintained over the past months. The primary obstacle remains the limited housing inventory, curtailing the potential for increased sales volume.
Federal Reserve Decisions: Rate Augmentation Amid Economic Strength
The Federal Open Market Committee (FOMC) convened recently, concluding with a decision to augment their benchmark interest rate by 25 basis points. Consequently, the Fed Funds Rate has reached its apex in over two decades, marking its 11th hike within a year. The committee also indicated potential future rate increases contingent on macroeconomic developments pertaining to job growth and overall economic progression. Post this announcement; bond rates have seen an uptick, which could likely lead to increased mortgage rates.
Gross Domestic Product: Expansion Indicating Growth
The U.S. economy expanded at an annualized rate of 2.4% in the second quarter of 2023. Unlike the previous quarter, this growth was aided by business investments and new construction projects. Personal consumption also resumed its upward trend, contributing to economic growth. Given these favorable conditions, it is plausible that the economy might avoid a recession in the current year.
Consumer Confidence: A Positive Outlook Despite Economic Challenges
Consumers, who have leaned heavily on credit over the past years, are demonstrating resilience thanks to a strong labor market, mitigated inflation, and rising wages. Consumer confidence reached a two-year high in July, indicating a positive economic outlook. While lingering concerns remain over a possible recession, these factors suggest a more gradual economic downturn than initially projected.
Interest Rates: An Upward Trajectory
After a brief decline following a recent inflation report, 30-year mortgage rates have resumed an upward trajectory. The current rates are slightly above 7%, and with bond prices decreasing since the Fed’s rate hike, mortgage rates will probably continue to rise, potentially dampening homebuyer demand.
New Home Sales: A Temporary Decline
With existing housing inventory facing a shortage, many prospective homebuyers have pivoted towards new construction. However, there has been a slight decrease in recent home sales after a considerable surge in May. This drop, coupled with the increase in residential starts and permits primarily in regions outside California, indicates potential challenges.
California Housing Market: Persisting Inventory Shortage Amid Rising Rates
Despite the rising rates affecting some prospective buyers, California’s housing market has sustained the modest gains achieved over the past year. However, a persistent decrease in housing inventory is the most significant impediment to a more vigorous recovery in home sales.
Ventura County
The June 2023 Ventura County California Housing Market Statistics provide a comprehensive overview of the current real estate landscape in the region. Analyzing key data points from various cities within the county, this report sheds light on the performance of the housing market, encompassing both existing single-family home sales and active listings. The data highlights notable trends and shifts, allowing us to gain valuable insights into the market’s dynamics. Let’s delve into the statistics from each city, focusing on key indicators that have influenced the market during this period.
Sales Experience a Significant Decline
In Moorpark, existing single-family home sales have witnessed a substantial 36% drop compared to the previous year, resulting in 16 home sales during JUNE 2023.
Median Price Experiences a Moderate Decrease
The median price for existing single-family homes in MOORPARK stands at $873K, showing an 8.2% decrease from 2022. This decline may indicate a potential shift in the market’s pricing dynamics, which might impact buyer affordability and seller expectations.
Limited Inventory Continues to Impact the Market
Moorpark’s active listings have plummeted by a striking 61.9% from 2022, leaving only 16 properties available for potential buyers. The scarcity of inventory could exert pressure on demand and result in increased competition among buyers.
Median Days on Market (DOM) and Negotiation Power
The median DOM in Moorpark is 31 days, showcasing the average time it takes for homes to be sold. Moreover, buyers are willing to pay 100.9% of the list price, indicating a highly competitive market environment.
Reduced Prices Present Opportunities for Buyers
Around 31.3% of active listings in Moorpark have experienced reduced prices, potentially creating opportunities for buyers looking for properties at more competitive rates.
Substantial Decline in Sales Activity
Camarillo’s existing single-family home sales have experienced a significant 39.7% decline compared to the previous year, with 35 homes sold in JUNE 2023. This trend might be influenced by factors such as economic conditions or changing buyer preferences.
Modest Drop in Median Price
The median price for existing single-family homes in Camarillo is $872K, indicating a slight 2.6% decrease from 2022. Such a decline could potentially impact market dynamics and influence buyer and seller behaviors.
Scarce Inventory Affects the Market
Camarillo’s active listings have diminished by 48.5% since 2022, leaving only 35 properties available for potential buyers. The limited inventory could drive increased competition among buyers in their search for suitable homes.
Faster DOM and Strong Negotiation
The median DOM in Camarillo stands at 19 days, suggesting a shorter duration for homes to be sold in this competitive market. Furthermore, buyers are paying the full list price (100%) on average, underlining their willingness to secure properties promptly.
Opportunities with Reduced Prices
Approximately 42.9% of active listings in Camarillo have seen reduced prices, potentially presenting advantageous prospects for buyers seeking properties at more favorable terms.
Steady Sales Performance
Ojai’s existing single-family home sales have remained unchanged from 2022, with 14 homes sold in June 2023. This stable sales figure may indicate consistent demand in the market.
Significant Drop in Median Price
The median price for existing single-family homes in Ojai is $1.23M, showing a considerable 24.3% decline from 2022. Such a price shift could influence buyer behavior and market dynamics.
Limited Inventory Impacts Market Activity
Ojai’s active listings have decreased by 20.6% since 2022, leaving 27 properties available for potential buyers. The constrained inventory might affect the pace of market activity and lead to a more competitive landscape.
Median DOM and Negotiation Insights
The median DOM in OJAI is 34 days, representing the average time it takes for homes to be sold. Additionally, buyers are willing to negotiate and pay approximately 99.6% of the list price.
Opportunities for Buyers with Reduced Prices
Around 29.6% of active listings in Ojai have experienced reduced prices, offering potential opportunities for buyers seeking favorable deals.
Notable Decline in Sales Activity
Oxnard’s existing single-family home sales have experienced a significant 31.6% decrease compared to the previous year, with 39 homes sold in June 2023.
Moderate Drop in Median Price
The median price for existing single-family homes in Oxnard stands at $725K, indicating a 4.6% decrease from 2022. Such price adjustments may influence buyer preferences and affordability.
Limited Inventory Poses Challenges
Oxnard’s active listings have dropped by 56.2% since 2022, leaving only 39 properties available for potential buyers. The scarcity of inventory could intensify competition among buyers.
Median DOM and Strong Negotiation
The median DOM in Oxnard is 25 days, implying a relatively swift pace of home sales. Furthermore, buyers are willing to pay approximately 102.3% of the list price, demonstrating their eagerness to secure properties.
Fewer Opportunities with Reduced Prices
Only 17.9% of active listings in Oxnard have seen reduced prices, potentially limiting opportunities for buyers seeking properties with discounted rates.
Substantial Drop in Sales Activity
Ventura’s existing single-family home sales have experienced a significant 40.3% decline compared to the previous year, with 37 homes sold in June 2023.
Notable Decrease in Median Price
The median price for existing single-family homes in Ventura is $850K, indicating an 8.6% decrease from 2022. This price adjustment could impact market dynamics and buyer behavior.
Diminished Inventory Shapes the Market
Ventura’s active listings have decreased by 38.4% since 2022, leaving 45 properties available for potential buyers. The reduced inventory could lead to increased competition among buyers in their search for suitable homes.
Median DOM and Favorable Negotiation
The median DOM in Ventura is 22 days, suggesting a relatively rapid pace of home sales. Additionally, buyers are willing to negotiate and pay around 102.0% of the list price.
Opportunities with Reduced Prices
Approximately 24.4% of active listings in Ventura have seen reduced prices, offering potential opportunities for buyers seeking properties at more favorable terms.
Dustin Balloun, Ventura County Coastal Association of REALTORS®