As we are approaching the end of May, I am excited to take a look at the new monthly real estate numbers for our South Bay marketplace.
My nerdy excitement for these numbers might be greater than the average person. That said, during times like these, it will pay off for you to pay close attention to the numbers if you are thinking of making a real estate move.
In the meantime, I wanted to share the new April numbers released last week by the California Association of Realtors (C.A.R.).
Important Data from C.A.R.
Statewide, existing single-family homes sales totaled 277,440 in April, which was down 30.1% compared to April of 2019, which was at a total of 373,070.
More interesting, this was the first time California home sales dropped below 300,000 since March 2008 during the beginning of the Great Recession.
Although an anomaly due to the nature of a pandemic, it was the largest month-over-month sales drop since 1979, which is when C.A.R. began tracking the data…I am sure it would break some records past that date too.
This line was noteworthy to copy and paste directly from C.A.R. as they see price softness in the large numbers:
“While the statewide median price remained above the $600,000 benchmark for the second consecutive month in April, price growth showed clear signs of softening when compared to the past six months. The April statewide median price of $606,410 for existing single-family homes in the state dipped 1.0 percent from March, and the 0.6 percent gain was essentially flat from April 2019, when the median price was $603,030. The year-over-year price gain was substantially smaller than the six-month average gain of 7.8 percent recorded between October 2019 and March 2020.”
I have been very clear in all blog posts that we need more data and more time to truly see the impacts of the pandemic. It is important to highlight, however, considering recent positive national housing reports this week and last, California looks to be much softer than other areas of the country.
The big regional data that is so important to watch is C.A.R.’s numbers on the Los Angeles Metro area…
Los Angeles Metro median single-family sold price in April 2020 was $550,000.
That is 1.1% lower than March 2020, which was at a price of $556,250. Year-over-year comps had prices up 2.5% from April 2019, which stood at $536,450.
Sales for Los Angeles Metro were down 30.9% year-over-year and 21.2% compared to March.
Good Quote to Note
I believe that I have mentioned this in past blogs, but if you are focused on local real estate in the South Bay, Los Angeles County, and California, then disregard statements from Lawrence Yun, the Chief Economist at N.A.R. (National Association of Realtors).
Mr. Yun gets a lot more press on national news and almost always tries to spin the recent statistics in a positive light. Please remember, his constituency are Realtors who want confident buyers and sellers and more sales, which lead to more commissions.
Instead, follow Leslie Appleton-Young who is C.A.R.’s Chief Economist. Her information is much more applicable to our local markets and I find that she “keeps it real.” This is Appleton-Young’s commentary on the California April numbers:
“With the recession-level decline in closed home sales, the statewide median price was just barely able to avoid going into negative territory in April, in part because high-end homes saw the biggest sales declines. Even with tight supply and low interest rates, home prices will continue to be tested by economic deterioration in the short term.”
This is commentary regarding statewide median prices dipping 1% from March and just a 0.6% gain from last April, which is essentially flat numbers year-over-year.
This statement is a solid, measured response on the current state of the market by Appleton-Young. She addresses recession risk, uncertainty, while not still panicking, since we still need more data and time to figure out where home prices are going thanks to the pandemic.
South Bay Sales Relative to the State/Region
So, how do the South Bay April numbers stack up to the state and regional areas?
If you missed my April Real Estate Market Update on May 7th, then be sure to reference that blog post here.
- Statewide, homes sales were down 30.1% a year ago.
- Los Angeles Metro home sales were down 30.9% a year ago.
- Manhattan, Hermosa, and Redondo Beach sales were down 47.7%, 35%, and 56.5% respectively, clearly surpassing the sales drops of our state and regional area (not good numbers).
- Palos Verdes 90274 and 90275 sales were up 3.7% and down 23.8% respectively, showing that The Hill was more resilient compared to the state and regional numbers (good numbers).
Leslie Appleton-Young astutely encapsulates into her commentary, “…in part because high-end homes saw the biggest sales declines.” The South Bay areas I cover in this weekly blog are certainly in the realm of high-end homes and our markets (along with other high-end markets) were hit much harder than other areas according to Appleton-Young. That said, some may take comfort that Palos Verdes outperformed the high-end statistics.
The Beach Cities’ under performance might have some market-watchers worried, but it is just one month. At the same time, the strength in Palos Verdes is a positive but should be taken with cautious optimism.
We have a long way to go.
Next week is a big week as my post will have the full South Bay May numbers which may begin to show us where the market could slowly trend. I am pumped!
Not everyone is as fired up as I am to dive into the numbers but I am happy to do the work, and hopefully, you’ll check back next week to see the results to help you understand how to manage your real estate aspirations and portfolio.
Please feel free to subscribe to the blog and I will see you next week with the latest local numbers.
Richard Haynes
DRE: 01779425
For more South Bay real estate insights, subscribe and follow Richard’s social channels below:
The Richard Haynes Real Estate ShowA leader in South Bay real estate for the better part of a decade, Richard thrives as an advisor to his clients with over $248 million in sales as a broker or investment principal at his boutique agency, Haynes. Richard is known for his keen local market insights which have been featured in the L.A. Times, The Street, and Forbes, along with his weekly South Bay real estate blog. [read more]