California’s housing market remained red hot in November 2020 with statewide home sales reaching the highest level in 15 years. Record-low mortgage rates and flexibility to work from home has driven home-buying interest to levels not seen since the last decade, according to the California Association of REALTORS^® (C.A.R.).

November 2020’s statewide sales total broke the 500,000-units benchmark for the first time since January 2009.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 508,820 for November 2020. It was an increase of 5 percent from 484,510 homes in October, and 26.3 percent higher from November 2019, when 402,880 homes were sold.

The year-over-year, double-digit home sales gain recorded in November was the fourth consecutive month and the largest increase over a year’s time since May 2009.

Meanwhile, California’s median home price for November 2020 dipped slightly after breaking the $700,000 benchmark over the past three months. The statewide median price dropped to $699,000 in November 2020, down 1.7 percent from $711,300 in October 2020.

However, home prices continued to gain on a year-over-year basis with the statewide median price surging 18.5 percent from $589,770 recorded in November 2019. The double-digit increase from 2019 was the fourth month in a row and the highest 12-month gain since February 2014. The gain was also higher than the six-month average of 9.7 percent observed between May 2020 and October 2020. 

November 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

In San Diego County, November 2020 home sales decreased 7.8 percent, compared to October 2020, but increased 23.2 percent higher than in November 2019.

Similarly, the median home price for a single-family home in San Diego County dropped slightly in November 2020 to $740,000, a 1.2 percent decrease from October 2020’s figure of $749,000, but a 12.3 percent increase from November 2019’s figure of $659,000.

“Home-buying interest is at levels that we have not seen for years, setting the stage for a stronger-than-expected comeback that fully recovered all the sales that the market lost in the first half of the year due to the pandemic,” said 2021 C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “Housing supply remains an issue, however, as we will likely to see a shortage of homes for sale in the near term, which will put upward pressure on prices and dampen affordability for those who haven’t been able to take advantage of low rates.”

“California’s housing market continues to be the bright spot in the economy, but the direction and pace of the recovery will hinge on the coronavirus pandemic and the distribution of the vaccine in the coming months,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The rise in COVID-19 cases and tighter constraints on economic activity recently imposed will likely have implications for the housing market as renters and homeowners face adverse impacts to their incomes, which is why Congress should pass additional relief for renters, homeowners, and workers as soon as possible.”

Perhaps due to rising cases of the Coronavirus, fewer consumers said it is a good time to sell in December, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in earlier this month, the poll found that 55 percent of consumers said it is a good time to sell, down from 59 percent a month ago, but up from 51 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; just over one-fourth (27 percent) of the consumers who responded to the poll believed that now is a good time to buy a home, up from last year, when 24 percent said it was a good time to buy a home.

Even with low inventory levels, the coronavirus pandemic has increased the demand for spacious, multi-functional homes as more homeowner families are dealing with homebound distance learning for school and working remotely for the job.

Other key points from C.A.R.’s November 2020 resale housing report included:

-- Home sales from a regional perspective continued to increase in November 2020 by double-digits in year-over-year comparisons for most California regions. The San Francisco Bay Area had the highest gain of 34.4 percent over last year, followed by the Central Coast (33.4 percent), Southern California (19.1 percent) and the Central Valley (18.3 percent).

-- Median home prices from a regional perspective also posted double-digit increases in November 2020 in year-over-year comparisons. The San Francisco Bay Area median price remained at its record high in November, rising 18.9 percent from last year. The Central Coast region had the second largest median price increase at 18.7 percent, followed by the Central Valley (17.6 percent), Southern California (14.4 percent), and the Far North (13.6 percent).

-- With a resurgence in Covid-19 cases in recent weeks and the market entering the traditional holiday season, active listings declined from the prior month as expected, contributing to a substantial decline in inventory. Active listings fell 46.6 percent from last year and continued to drop more than 40 percent on a year-over-year basis for the sixth straight month.

-- The unsold inventory of available homes for sale fell sharply from 3.1 months in November 2019 to 1.9 months in November 2020. Statewide inventory in October 2020 was 2.0 months. Inventory levels measured in months refers to the number it would take for the current supply of available homes on the market to sell-out given the current rate of sales.

November 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- In San Diego County, the inventory of available homes for sale in November 2020 was 1.6 months, compared to 1.8 months in October 2020 and 2.7 months in November 2019.

-- Active listings in all major California regions continued to decline in November 2020 in year-over-year comparisons. The Central Valley had the biggest year-over-year drop of 53.3 percent in November, followed by Southern California (49.0 percent), Central Coast (-46.3 percent), Far North (-40.1 percent), and the San Francisco Bay Area (-18.7 percent).

-- The median number of days it took to sell a California single-family home was nine days in November 2020, compared to 10 days in October 2020, 11 days in September 2020 and 25 days in November 2019. The nine-day November 2020 figure was the lowest ever recorded.

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was seven days in November 2020, which was the same number in October 2020 and September 2020. The timeframe a year ago in November 2019 was 17 days. The November 2020 seven-day figure compares to eight days in August 2020, 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- The housing market in California’s mountain resort areas has generally outperformed the state during 2020’s first 11 months due to increased demand in second homes and vacation homes, as available supply continues to decline. In a comparison of home sales between November 2020 and November 2019, Mammoth Lakes saw a 400 percent increase, followed by South Lake Tahoe (81.4 percent), Big Bear (73.9 percent) and Lake Arrowhead (58.1 percent). Similarly, median home prices jumped in Big Bear by 40.8 percent from last year, followed by South Lake Tahoe (39.6 percent) and Lake Arrowhead (32.0 percent). In contrast, home prices declined by 2.5 percent Mammoth Lakes in November 2020, compared to 2019.

-- The 30-year, fixed-mortgage interest rate averaged 2.77 percent in November, down from 3.70 percent in November 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.0 percent, compared to 3.41 percent in November 2019.

In other recent real estate and economic news, according to news reports:

-- The average rate for a 30-year, fixed-rate mortgage continued to plummet, dropping to 2.67 percent in the second week of December. It was the lowest rate since Freddie Mac began tracking the data in 1971. A year ago at this time, it averaged 3.73 percent.

-- Mortgage applications increased 1.1 percent for the week ending Dec. 11, according to the Mortgage Bankers Association’s week-over-week comparison report. Refinance applications also increased 1 percent during the same week and 105 percent in a year-over-year comparison.

-- CoreLogic said San Diego County median home price in November remained unchanged from October and September at $650,000, which is 9.3 percent higher than a year ago. It was the second consecutive time for no monthly price increase since May. The price represents all homes, including single-family, condos and townhomes.

-- A group of top real estate economists speaking at a forecast forum hosted by the National Association of Real Estate Editors recently predicted that home prices will continue to rise in 2021 fueled by low mortgage interest rates and lack of homes for sale.

-- Californians are pessimistic about their economic future with 73 percent of survey respondents in San Diego and Orange counties anticipating bad financial times during the next 12 months, according to a report released in early December by the Public Policy Institute of California. The survey of 2,325 Californians conducted after the November election showed the statewide average of pessimism at 68 percent.

-- Realtor.com is predicting prices for existing single-family homes will continue to climb in 2021, making affordability a continued problem. San Diego is projected for an 11.3 percent year-over-year increase in existing home sales and a 5.5 percent rise in home prices. Realtor.com also expects mortgage rates to climb from 3 percent at the beginning of 2021 to 3.4 percent by year’s end. Realtor.com admits there are numerous wildcards that could shake up the housing market, including what happens with Covid-19 vaccines or more government-imposed shutdowns.

-- Rental applications in San Diego County were lower by about 7 percent for the third quarter in a year-over-year comparison as many grown children moved back in with their parents, or doubled up in apartments to make their dollars go further, according to the data firm Rent Café. The report said in 18 of the 30 largest U.S. cities, including San Diego, more renters left than moved into rental properties. The firm also said apartment rents decreased in 2020 in the nation’s top 10 most expensive cities.

All PSAR members should be aware of the significant benefits available to homeowners as a result of the recent passage of Proposition 19 in the November general election.

Approved by California voters by a 51.1 percent to 48.9 percent margin, Prop. 19 is considered by many as a landmark property tax exemption law that is now part of the California constitution. Thanks to more than 8.5 million voters who marked their ballots “yes” for Prop. 19, homeowners will be able to take advantage of tax relief while providing much-needed revenue for schools, fire districts, cities and counties as they face budget shortfalls due to the harmful economic impact of Covid-19.

Prop. 19 was endorsed by C.A.R. and many others because it will spur housing economic recovery.

Prop. 19 limits property tax increases on primary residences for family transfers, homeowners over 55 years old, people with severe disabilities and victims of natural disasters or wildfires by removing unfair location and price restrictions.

Prop. 19 also limits property tax increases on family homes used as a primary residence by protecting the right of parents and grandparents to pass on their family home to their children and grandchildren for continued use as a primary residence.

Overall, Prop. 19 will open up tens of thousands of housing opportunities, making homes more readily available for first-time homeowners, families and Californians throughout the state.

There are two major benefits of Prop. 19, both dealing with what’s called “tax basis portability,” which means homeowners can enjoy an exemption from a reassessment of property taxes when they move to a new residence.

New Rules for Homeowners Over 55 Years of Age

With the passage of Prop. 19, a homeowner who is over 55 years of age, severely disabled or whose home has been substantially damaged by wildfire or natural disaster may transfer the taxable value of their primary residence to a replacement primary residence anywhere in the state within two years of the sale and up to three times, regardless of the value of the replacement primary residence.

According to the California Association of REALTORS® (C.A.R.), Prop.19 makes three significant changes to the portability of one’s tax basis from the sale of a principal residence to a replacement principal residence.

First, Prop. 19 allows a seller of a principal residence to transfer the tax basis of that principal residence to the purchase of a replacement principal residence anywhere in the State of California. Under prior law, the seller was limited to transfers either within the same county (under Proposition 60) or between a limited number of counties that specifically permitted such taxable value transfers (under Proposition 90).

Second, Prop. 19 allows the transfer of the tax basis of the sold principal residence to the replacement principal residence regardless of value with certain adjustments to the tax basis if the replacement principal property is of “greater value” than the sold principal residence. Under prior law, only transfers of “equal or lesser value” were eligible for the exemption.

Third, Prop.19 permits such transfers up to three times (but unlimited for those whose homes were destroyed or substantially damaged by fire). Prior law allowed such transfers only one time

There still remains some questions about the timing of tax benefits under Prop. 19 applying to transactions and sales before April 1, 2021.

According a statement from C.A.R., “Although we believe that the tax benefits under Proposition 19 apply to transactions where either the sale or purchase of a primary residence takes place before April 1, 2021, as long as the subsequent sale or purchase takes place within two years and on or after April 1, 2021, others have taken the position that both the sale and purchase must occur on or after April 1, 2021. C.A.R. will seek official clarification of this issue.”

New Rules on Intergenerational Family Transfers After Feb. 1, 2020

Prop. 19 also changes the rules on exemptions from reassessment for intergenerational transfers by limiting the exemption to the transfer of a primary residence to a child (or grandchild) only when the property continues to be used as a family home by the child (or grandchild). However, if the divergence between the taxable value and the actual value is too great, a partial increase in the new taxable value will be imposed.

Prop. 19 also includes provisions that would allow the transfer of a family farm to retain its taxable value.

These new rules apply to any purchase or transfer beginning Feb. 16, 2021.

Here are a few questions-and-answers relating to intergenerational family transfers and family farms:

Q: If I pass my principal residence on to my children or grandchildren, will the property be reassessed?

A: So long as the property continues to be used as a family home (primary residence), and the transferee claims the homeowner exemption, the property tax basis will remain the same, subject to some upward adjustments if the property value, at the time of transfer, is more than $1M over the original tax basis.

____________________________

Q: If the property is transferred to a child or grandchild and used as a family home, what will the new tax basis be if at the time of transfer the property value is less than $1M over the original tax basis?

A: The new tax basis will remain the same as the original tax basis. For example, if the original tax basis was, let's say, $500,000, and at the time of transfer the property is valued at $1.2 M, then the tax basis will remain at $500,000. This is because $1.2M is not more than $1M over the original taxable basis.

____________________________

Q: How are family farms included in Proposition 19?

A: Family farms have the same exemptions as family homes (principal residences). “Family Farm” means any real property under cultivation or which is being used for pasture, or grazing, or that is used to produce any agricultural commodity. It does not require the transferee to live in the property as a principal residence.

PSAR members who have additional questions about the benefits of Prop. 19 are encouraged to contact either C.A.R. or the office of San Diego County Assessor-Recorder-County Clerk (ARCC) Ernest J. Dronenburg, Jr. The ARCC office oversees assessing the value of real estate and personal property (property taxes constitute the largest share of revenue for the county). The office also involves registering business names and issuing marriage licenses, birth and death certificates. 

For assistance from the Assessor’s office please contact Taxpayer Advocate Jordan Marks. Jordan is a PSAR member and welcomes calls and emails from PSAR members. He can be reached at Jordan.Marks@sdcounty.ca.gov. For emergency assistance you can reach Jordan on his cell phone is (619) 372-0226.The website for the ARCC office is www.SDARCC.com.

You may have seen the recent headlines about the U.S. Department of Justice (DOJ) having filed an antitrust lawsuit alleging the National Association of REALTORS® (NAR) maintained illegal, anticompetitive restraints on REALTOR® competition, including business practices and policies that prohibited multiple-listing services from disclosing commissions for buyers’ agents to prospective buyers.

The Justice Department accused NAR, the real estate industry’s largest trade group with more than 1.4 million members and 1,400 local associations, with restraining free trade under the Sherman Act, thus creating an environment in which there was little visibility for homebuyers to learn about the commission a buyer’s agent would earn.

This announced action sounds alarming.

However, with a look past the headlines, you will see that the current settlement between the DOJ and NAR, which was announced at the same time as the antitrust complaint filing, means that future outcomes are expected to trend positive for our real estate profession.

According to NAR, who maintained that there was no wrongdoing committed, the settlement requires the following changes in the way in which REALTORS® compete:

 #1. Public display of buyer broker compensation.
“The amount of compensation offered to a buyer’s agent for each MLS listing will be made publicly available. Publicly accessible MLS data feeds will include offers of compensation, and buyers' agents will have an affirmative obligation to provide such information to their clients for homes of interest.”

#2. Consumer access to all properties that fit their criteria.
“MLSs and brokerages, as always, must provide consumers all properties that fit their criteria regardless of compensation offered or the name of the listing brokerage.”

#3. Forbidding buyers’ agents from representing services as “free.”
“While NAR has long encouraged buyers' agents to explain how they expect to be paid, typically through offers of cooperative compensation from sellers' agents, there will be a rule that more definitively states that buyers' agents cannot represent that their services are free to clients.”

#4. Lockboxes and licensed agents.
“With the seller's prior approval, a licensed real estate agent will have access to the lockboxes of properties listed on an MLS even if the agent does not subscribe to the MLS.”

“For the most part, these changes more explicitly state what already is in the spirit and intent of the NAR Code of Ethics and MLS policies regarding providing information about commissions and MLS participation,” said Robert Cromer, 2020 PSAR President. “PSAR has long sought to ensure fairness, transparency and a competitive real estate market for home buyers and sellers. We have always been committed to an MLS system that puts consumers first and benefits homebuyers, sellers and brokerages.”

According to a statement from Makan Delrahim, Assistant Attorney General of the Justice Department’s Antitrust Division, “Buying a home is one of life’s biggest and most important financial decisions. Home buyers and sellers should be aware of all the broker fees they are paying. Today’s settlement prevents traditional brokers from impeding competition, including by internet-based methods of home buying and selling, by providing greater transparency to consumers about broker fees. This will increase price competition among brokers and lead to better quality of services for American home buyers and sellers.”

The California Regional Multiple Listing Service (CRMLS) said in a statement, “CRMLS plans to fully comply with the terms of this government-mandated agreement, once finalized. Visit www.go.CRMLS.org/NewRules to keep up to date on how CRMLS will implement these rules.”

Inman News Service posted recent news articles covering possible disruptive consequences from the DOJ lawsuit and proposed settlement. These consequences include:

-- Commissions may be squeezed since consumers will have more visibility into options when choosing which real estate brokerage or agent with whom to work.

-- MLSs can no longer hide commission rates.

-- REALTORS® will not be allowed to set a filter in the MLS for homes for potential buyers based on commission levels.

-- Buyers’ agents cannot make misrepresented statements, for example, “My services are free” (because they aren’t free if the seller pays the commission).

-- A licensed agent cannot be denied lockbox access on the basis of not being an MLS member.

The DOJ-NAR settlement is not yet final as the DOJ is still receiving public input. A DOJ statement said comments regarding the proposed final judgment may be submitted to Chief, Office of Decree Enforcement and Compliance, Antitrust Division, U.S. Department of Justice, 950 Pennsylvania Ave., N.W., Washington, D.C., 20530. The DOJ also stated, “At the conclusion of the 60-day comment period, the court may enter the proposed final judgment upon a finding that it serves the public interest.”

Zillow appears to be in the process of becoming a REALTOR brokerage. The story has been evolving during 2020.  As Zillow transitions from being a listing distribution or advertising platform to a REALTOR (member of NAR, CAR and also some local local Associations,) they will receive the same rights and benefits as other brokerages.

Among these rights is the right to access IDX (Internet Data Exchange) feeds.  

Today, Zillow receives listing data from brokers instructing CRMLS to provide their listing information through a specifically tailored listing distribution feed called a syndication feed. Once Zillow becomes a brokerage in the CRMLS area, they will access listings through the same feeds that brokers receive on their web pages today.

What could this change mean for agents and brokers?

Listing distribution control changes: 
The CRMLS system currently permits brokers to control which listing distribution partners receive their listings, including Realtor.com, Homes.com, Apartments.com, and Zillow. Those options will soon change. As Zillow will be a participating brokerage instead of a listing distribution partner, brokers will not be able to specifically exclude Zillow from receiving their listings. 

Changes to how listings display on Zillow
Because of the switch to IDX feeds, listing data will display on Zillow differently than it does today. Full details are still forthcoming. CRMLS shared, however, that their IDX licensing agreement does not permit advertising in the way you may be used to on Zillow.  Zillow will update its current listing displays to comply with CRMLS IDX standards, the same as any brokerage that uses that same IDX listing data feed. IDX rules can be found in section 12.16 of the CRMLS Rules and Regulations.

Changes to rental listing search on Zillow
You may have heard rumors that Zillow plans to start charging fees for rental listings. (In fact, per Zillow, Zillow has charged fees for rental listings for “about a year,” except for MLS-sourced listings.) As outlined above, Zillow is also moving to IDX feeds. It’s reasonable to wonder how these two things can coexist.

CRMLS reached out to Zillow and confirmed that Zillow will no longer combine rental and for-sale properties in the same search. In other words, their IDX feed for MLS-sourced for sale listings will not comingle with their feeds for rental listings.

Per Zillow, “None of the fees… will be implemented until Jan 2021 and will not be on any listings under [Zillow’s] current syndication license.”

Zillow continued: “Under IDX, [Zillow] will not be pulling or displaying any [rental] listings under the IDX license. The rentals search will be a completely separate search experience on the site.”

2020 has certainly been an unusual and turbulent year complete with some major challenges. Life was dramatically upended early on with the pandemic, economic lockdowns, homeschooling, politics and natural disasters. These and more unsettling events in 2020 hit many people hard, leaving them with a sense of chaos, stress and uncertainty.

With that as a backdrop, heading in to 2021 what can real estate professionals expect? Economist Steven Thomas, publisher of “Reports on Housing,” a newsletter covering the regional real estate market, recently delivered his 2021 Southern California Housing Market Forecast to PSAR members.

Thomas, with a degree in Quantitative Economics and Decision Sciences from the University of California San Diego, is a California real estate broker with decades of real estate experience. He has been quoted in news stories published by the Orange County Register, Los Angeles Times, San Diego Union-Tribune, The Wall Street Journal, Fortune, USA Today, Bloomberg, ABC, CBS and NBC television, Cox Cable Television, KNX AM-1070 News Radio, KFI AM-640 Radio, blogs and Internet news sites. 
Thomas noted how quickly the economy rebounded following the Covid-caused economic shutdowns that began in March 2020. Thomas observed that the 2020 housing market is ending the year in much better shape than anyone expected.

Thomas commented that in 2020, it only took four months before the unemployment rate reached 9 percent month By comparison, the amount of time needed to reach 9 percent unemployment was 19 months during the 1980s oil recession, 30 months during the Great Recession (December 2007 to June 2009) and 108 months during the Great Depression (August 1929 to March 1933).

The U.S. Commerce Department reported the nation’s third-quarter domestic product (GNP), a measure of the total goods and services produced in the July-to-September 2020 period, grew at a 33.1 percent annualized rate. That’s the fastest growth ever for the U.S. economy and is all the more remarkable as it follows the worst quarter in history when the economy plunged 31.4 percent. The previous GNP quarterly growth record of 16.7 percent was set following World War II in the first quarter of 1950.

Thomas believes that in 2021, the California housing market will continue to rebound from this year’s economic shock, thanks to rock-bottom mortgage rates, a rebounding GNP and strong homeownership demand. As a result of these factors, financially eligible buyers will be motivated to enter the market.

Based on November 2020 statistics, Thomas said buyer demand in San Diego County was at its strongest level since 2012.

Thomas illustrated buyer demand with this imaginary conversation:

-- Potential buyer: “Hi, I’m looking to buy a house. How’s the market?”
-- REALTOR^®: “Remember back in May when you were looking for toilet paper? Yeah, just like that.”

However, Thomas said that the most likely scenario is that the lingering uncertainty about the economy, a volatile stock market and a shortage of homes for sale will keep the 2021 housing market in check and prevent the overall economy from returning to full strength. That model also assumes no major resurgence of Covid cases next year.

While the beginning of the year might be slow for some REALTORS^®, housing market conditions will show a steady improvement throughout 2021. Thomas expects a steady, if not spectacular, rise in home prices and sales.

Thomas believes housing inventory levels and prices will appreciate 4 to 6 percent in 2021. Closed sales in 2021 will be higher by 4 percent to 8 percent, compared with 2020.

He also predicts a slight increase in the number of distressed properties, but not a wave of foreclosures. The 2021 market will herald the return of sellers who have unrealistic expectations and overprice their homes.

According to Thomas, traditional home buying and selling seasons, prevalent in past decades, may be changed forever because of the market effects of Covid-19. The normal Fall cool down occurs as students return to school. However, start-of-school market timelines are no longer applicable with delayed reopening of in-person school attendance. As a result, sellers will continue to receive top dollar for their homes outside the prime selling season in 2021. Homes will continue to sell quickly and buyer demand will not taper-off in the foreseeable future.

Thomas said current expected market time levels in San Diego County are at their lowest since 2013.

He said recent statistics show the median number of days an existing, single-family home remains unsold on the market varies throughout San Diego County: Chula Vista, 12; La Mesa, 17; Lemon Grove, 19; El Cajon, 27; National City, 27; Bonita, 30; Downtown, 132; Coronado, 143. He also said lower-priced homes are selling faster (28 days under $500K), compared to higher priced homes (100 days for $2M-$4M). Existing houses make up about two-thirds of all home sales.

He said available inventory of higher-priced, move-up homes will improve slightly, aided by a growing number of move-up sellers in 2021. Luxury home sales will thrive next year in spring and summer, then slow during the latter third of the year.

Thomas also predicted that monthly interest rates on typical 30-year home loans will average between 2.75 percent and 3.5 percent

Thomas offers a “Reports on Housing” monthly subscription for $15 per month or $150 per year. The regional report tracks regional demand, inventory, distressed homes and other market data. It also shares what buyers, sellers and real estate professionals are experiencing in the trenches. One month free is available upon sign-up.

Steven Thomas can be followed on YouTube, visit www.Youtube.com/ReportsOnHousing
Facebook at @reportsOnHousing.
For more information, visit www.reportsonhousing.com.

Fall is the new spring for the California’s housing market as record-low mortgage rates, skyrocketing buyer demand and shrinking inventory are making this fall season resemble a typical, active springtime for homebuyers and sellers. In October 2020, home sales and prices recorded double-digit increases compared to a year ago, according to the most recently monthly report from the California Association of REALTORS® (C.A.R.).

C.A.R. said California’s homebuying season is extending into the fall as home sales and prices remained elevated in October. Continued record low mortgage interest rates sustained the housing market in October as home sales and prices took a breather from September’s record high levels.

October’s sales total climbed above the 400,000 level for the fourth straight month since the Covid-19 crisis depressed the housing market earlier this year and was just 15,000 units shy of the 500,000 benchmark. Existing, single-family home sales totaled 484,510 in October 2020 on a seasonally adjusted annualized rate. October 2020 sales dipped 1.0 percent from 489,590 in September 2020 but were up 19.9 percent from a year ago, when 404,240 homes were sold on an annualized basis.

In San Diego County, October 2020 home sales decreased 7.1 percent compared to September 2020, but increased 21.2 percent higher than in October 2019.

After setting new record highs for four straight months, California’s home median price dipped on a month-to-month basis for the first time in five months. The statewide median price stayed essentially flat in October 2020, slipping 0.2 percent to $711,300 from September 2020’s record high of $712,430.  However, the year-over-year growth rate continued to increase by double-digits for the third consecutive month and was the second highest gain since February 2014. There was a 17.5 percent difference between October 2020’s median price of $711,300 and October 2019’s median price of $605,280. October 2020’s median price also was higher than the six-month average of 6.8 percent observed between April 2020 and September 2020. 

October 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

In San Diego County, the median price for a single-family home in October 2020 was $749,000, a 1.9 percent increase from $735,000 in September 2020, and a 14.9 percent leap than the $652,000 figure in October 2019.

The coronavirus pandemic has heightened the desire for more spacious, multi-functional homes as more people have been forced to homebound distance learning for school and working remotely for the job.

Normally, the housing market experiences a cool-down in the fall as students return to school. However, timelines that normally revolve around the start of the school year are no longer applicable. That dynamic has changed with Covid delaying the reopening of schools for in-person learning.

As a result, sellers are continuing to receive top dollar for their homes outside the prime selling season. Homes are selling quickly and buyer demand shows no signs of tapering off anytime soon.

“California’s housing market continues to exceed expectations as this year’s traditional homebuying season has shifted into late summer and fall instead of spring and early summer,”  said 2021 C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “The market is unseasonably strong, as motivated buyers continue to take advantage of the lowest interest rates in history. The ongoing momentum will keep home sales elevated for the next couple of months, and the housing market will remain a rare bright spot in a struggling economy.”

“An extremely favorable lending environment and a renewed attitude towards homeownership is prolonging the homebuying season and extending the market’s V-shaped recovery to the off season,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The question that remains to be answered, however, is whether the strong market is sustainable in the longer term as market fundamentals continue to be tested by tight supply, eroding housing affordability, and most of all, the rising number of Coronavirus cases.”

Reflecting the rise in home prices, consumers continue to say it is a good time to sell, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in early November, the poll found that 59 percent of consumers said it is a good time to sell, up from 56 percent a month ago, and up from 47 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 31 percent of the consumers who responded to the poll believed that now is a good time to buy a home, up from last year, when 24 percent said it was a good time to buy a home.

Other key points from the October 2020 resale housing report included:

-- At the regional level, sales increased in October 2020 in all major regions compared to last year with growth rates of more than 10 percent, except in the Central Valley, which grew by 9.9 percent from a year ago.

-- Sales in resort communities remained robust in October 2020. Housing demand in Big Bear, including Big Bear City and Big Bear Lake, continued to surge with sales growing 125.6 percent from last October. Lake Arrowhead and South Lake Tahoe both recorded strong sales in October, with year-over-year growth rates of 47.7 percent and 29.1 percent, respectively. Sales in Mammoth Lakes also jumped in the latest month with a gain of 55.6 percent from last October.

-- At the regional level, all major regions posted double-digit, year-over-year median price increases. The Central Coast led the pack again with an increase of 25.9 percent, as high-end home sales in Santa Barbara and Monterey continued to surge. The San Francisco Bay Area had the second largest price increase of 17 percent, followed by Southern California (15.4 percent), the Central Valley (14.7 percent), and the Far North (12.8 percent).

-- With active listings dipping slightly from the prior month, while the momentum of sales continued to push forward into the traditionally off-season months, the Unsold Inventory Index (UII) in October was unchanged from September, when it reached the lowest level in nearly 16 years. The UII fell sharply from 3.0 months in October 2019 to 2.0 months this October.

-- The unsold inventory of available homes for sale in October 2020 in California remained unchanged at 2.0 months, compared to September 2020, when it reached the lowest level in nearly 16 years since November 2004. Statewide inventory in October 2019 was 3.0 months.

-- In San Diego County, the inventory of available of homes for sale in October 2020 was 1.8 months, compared to 1.7 months in September 2020 and 2.8 months in October 2019. Inventory levels in months refers to the number it would take for the current inventory of homes on the market to sell-out given the current sales pace.

-- Active listings continued to decline significantly in October 2020, with most regions declining more than 40 percent from last year. The Central Valley had the biggest year-over-year drop of 49.6 percent in October, followed by Southern California (-46.6 percent), the Central Coast (-46.5 percent), the Far North (-40.9 percent), and the San Francisco Bay Area (-23.8 percent).

-- The median number of days it took to sell a California single-family home was 10 days in October 2020, compared to 11 days in September 2020 and 24 days in October 2019. The October 2020 figure was the lowest ever recorded.

October 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was seven days in October 2020, which the same number in September 2020. However, the timeframe was 18 days a year ago in October 2019. The seven-day figure compares to eight days in August 2020, 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- The 30-year, fixed-mortgage interest rate averaged 2.83 percent in October, down from 3.69 percent in October 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.89 percent, compared to 3.38 percent in October 2019.

In other recent real estate and economic news, according to news reports:

-- CoreLogic said San Diego County median home price in October remained unchanged from September at $650,000, which is 13 percent higher than a year ago. It was the first time for no monthly price increase since May. The price represents all homes, including single-family, condos and townhomes.

-- San Diegans searching for out-of-state homes for sale on Redfin are most frequently looking at lower-cost cities Phoenix and Las Vegas, along with areas in Riverside County. The homebuying website said 24.3 percent of searches originating from metropolitan San Diego in the 2020 third quarter included out-of-town communities, compared to 18.8 percent the same time last year. The most active metro area people were looking to leave was New York City at 35.8 percent.

-- Redfin also reports that San Diego had the second highest number of multiple offers on homes for sale in the U.S. in October, with 73.2 percent of Redfin homes in a bidding war, second only to Salt Lake City’s 75 percent. Nationwide, 56.8 percent of Redfin offers on home faced competition from at least two prospective buyers.

-- Zillow says homes are remaining unsold on the market for 12 days, which is 17 days less than last year. Also, sales listings in San Diego County are about 34 percent lower than a year ago.

-- The percentage of would-by homebuyers who could afford to purchase the $729,000 median-priced, existing single-family home in the 2020 third quarter in San Diego County was at 27 percent, compared to 30 percent in the 2020 2Q and 29 percent in the 2019 3Q, according to housing affordability index (HAI) statistics from the California Association of REALTORS®. Statewide, the HAI percentage of all California households that could afford to purchase the $693,680 median-priced, single-family home in 2020 3Q was 28 percent, which was the lowest in nearly two years.

-- Every metro area tracked by the National Association of REALTORS® (NAR) experienced annual home price increases in the 2020 third quarter, which was attributed in large part to record-low mortgage rates and depleted nationwide housing inventory. NAR said eight of America’s 10 most expensive metro areas were located in the West, led by San Jose ($1.4 million for a median-priced, single-family home), San Francisco ($1.125 million) and Anaheim, ($910,000). San Diego had the fifth highest median price for a single-family home in the U.S. at $729,000, according to NAR.

California’s housing market outperformed expectations in September 2020 with home sales at their highest level in more than a decade and the median home price at another record high for the fourth straight month.

According to the most recent monthly home sales and price report from the California Association of REALTORS® (C.A.R.), home sales and prices are setting records despite the lowest inventory in years.

The statewide inventory of 2.0 months in September 2020 was lower than 3.6 months in September 2019. It was the lowest statewide level since November 2004. In San Diego County, the inventory declined by nearly half from 3.1 months in September 2019 compared to 1.7 months in September 2020.

Closed escrow sales of existing, single-family detached homes in California approached the 500,000 level in September, making the Covid-19 pandemic that depressed California’s housing market earlier this year seem like a distant memory, although year-to-date homes sales were down 3.7 percent in September.

CAR said home sales totaled a seasonally adjusted annualized rate of 489,950 units in September 2020, according to information collected from more than 90 local REALTOR® associations and MLS statewide. The September 2020 statewide home sales number was up 5.2 percent from August 2020 and 21.2 percent higher than September 2019. It was the third straight month for home sales to exceed the 400,000 level and the highest level recorded since February 2009. September sales rose 5.2 percent from 465,400 in August 2020 and were up 21.2 percent from a year ago, when 404,030 homes were sold on an annualized basis in September 2019.

September 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

In San Diego County, September 2020 homes sales rose 7.5 percent compared to August 2020 and 32.8 percent higher than September 2019.

To complement high home sales figures, the statewide median home price hit another new high in September 2020, after setting records in June, July and August. California’s median home price exceeded the $700,000 mark for the second consecutive month, as it reached $712,430 in September 2020, edging up 0.8 percent from $706,900 in August 2020, and jumping 17.6 percent from $605,680 in September 2019. The yearly price increase was the highest recorded since February 2014 and higher than the six-month average of 5.3 percent observed between March 2020 and August 2020.

In San Diego County, the median price for a single-family home in September 2020 was $735,000, a 0.3 percent difference from $732,560 in August 2020, and 15.4 percent higher than the $636,750 figure from September 2019.

Home sales in all price segments are continuing to bounce back since the Covid-19 crisis depressed the housing market earlier this year while sales of higher-priced properties are recovering faster than the rest of the market.

Analysts say factors causing price increases include a lack of homes for sale leading to price wars, plus record low interest rates and workers stuck doing jobs from home are raising homeownership levels and some are looking for more square footage space.

“As motivated buyers continue to take advantage of the lowest interest rates in history, home sales will be elevated in the next couple of months, and the housing market should remain a bright spot in a broader economy that continues to struggle,” said C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “And with many employers allowing the flexibility of working remotely, homebuyers now also have the option of searching in less expensive areas where homes are more affordable and buyers can get more home for their money.”

“With the statewide home price hitting new highs for the past four months, it’s sounding like a broken record as California home sales and prices continue to outperform expectations,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “However, with the shortest time on market in recent memory, an alarmingly low supply of homes for sale, and the fastest price growth in six and a half years, the market’s short-term gain can also be its weakness in the longer term as the imbalance of supply and demand could lead to more housing shortages and deeper affordability issues.”

Reflecting the rise in home prices, consumers continue to say it is a good time to sell, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in early October, the poll found that 56 percent of consumers said it is a good time to sell, down from 58 percent a month ago, but up from 52 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 28 percent of the consumers who responded to the poll believed that now is a good time to buy a home, up from last year, when 22 percent said it was a good time to buy a home.

Other key points from the September 2020 resale housing report included:

-- At the regional level, homes sales increased in the high double-digits compared to last year in all major regions. The Central Coast and the San Francisco Bay Area had the strongest sales growth in September with both regions surging 42 percent and 34.2 percent, respectively. That was followed by increases in the Far North (28.3 percent, Southern California (25.0 percent and the Central Valley (18.4 percent).

-- At the regional level, home prices posted double-digit increases compared to last year in all major regions. The Central Coast had the highest increase in median price, rising 20.6 percent from last year, followed by the San Francisco Bay Area (20.5 percent, the Far North (19.0 percent, Southern California (15.2 percent) and the Central Valley (14.6 percent. All regions except the San Francisco Bay Area set a new high in median price in September.

-- Active listings in September 2020 continued to decline significantly in all major regions. The Central Coast had the biggest drop (-60.3 percent) from last September, followed by the Central Valley (-51.5 percent), Southern California (-49.9 percent), the Far North (-43.9 percent), and the San Francisco Bay Area (-31.9 percent).

-- Housing inventory tightened by double-digits in all price segments, but the constraint was more pronounced in the affordable markets. Active listings in every price range continued to decline sharply from last year, with for-sale properties priced below $1 million falling 56 percent on a year-over-year basis. Compared to a year ago, the supply for homes priced between $1 million and $3 million declined 30.4 percent, and homes priced at or above the $3 million benchmark declined 19.4 percent.

-- The median number of days it took to sell a California single-family home was 11 days in September 2020, down from 24 days in September 2019. It’s the lowest statewide figure ever recorded. The 11-day figure compares to 13 days in August 2020, 17 days in July 2020, 19 days in June 2020, 17 days in May 2020, 13 days in April 2020, 15 days in March 2020 and 23 days in February 2020.

September 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was seven days in September 2020, compared to 18 days in September 2019. The seven-day figure compares to eight days in August 2020, 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- The 30-year, fixed-mortgage interest rate averaged 2.89 percent in September, down from 3.61 percent in September 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.98 percent, compared to 3.38 percent in September 2019.

In other recent real estate and economic news, according to news reports:

-- The Commerce Department reported the nation’s third-quarter domestic product (GNP), a measure of the total goods and services produced in the July-to-September 2020 period, expanded at a 33.1 percent annualized pace. That’s the fastest growth ever for the U.S. economy and it follows the worst quarter in history when the economy plunged 31.4 percent in the second quarter 2020. The previous GNP quarterly record of 16.7 percent was set following World War II in the first quarter of 1950.

-- Realtor.com said the housing market is bucking the traditional trend of a cool-down in the fall season, which typically occurs as students return to school. While buyers normally begin to hunker-down this time a year, instead sellers are getting top dollar for their home outside of the prime selling season, said Realtor.com.

-- CoreLogic reports the September 2020 median home price in San Diego reached a new high of $650,000, which was a 10.2 percent increase since the Covid-19 lockdown began in March. September’s number exceeds the previous record of $640,000 in August 2020.

-- A recent S&P CoreLogic Case-Shiller reports home prices in San Diego increased 7.6 percent over the past year, the third-fastest in the nation and at a rate not seen in more than two years. The other cities with faster increases were Phoenix, up 9.9 percent, and Seattle, up 8.5 percent.

-- Redfin reports the median price of a single-family home in San Diego County rose 15.7 percent over the past year since September 2019 to $665,000. That compares to a 14.4 percent increase in the nationwide median home price to $333,900.

-- Zillow reports the median price of a single-family home in September was $632,264, marking a 7.6 percent increase from a year ago. Nationally, the typical home value rose 5.8 percent in a year-over-year comparison to $259,906 in September.

-- The Federal Housing Finance Agency said home prices increased 1.5 percent nationally from July to August, the largest month-to-month increase since 1991. Prices were 8 percent higher in August 2020, compared to August 2019.

-- A Redfin survey of more than 3,000 people in October revealed that 16 percent of them would consider moving to another country outside the U.S. if their preferred presidential candidate loses in November. That’s up from 9 percent four years ago. Redfin’s survey also found that 20 percent of Biden voters say they would leave the U.S. if he loses. Among Trump supporters, 15 percent said they’d depart if the President loses reelection. A greater percentage, 24 percent, said they are considering moving to another state. Redfin also reports landlords in multiple states are thinking about raising rents if Biden wins.

The Covid-19 pandemic that depressed California’s housing market earlier this year seems like a distant memory after the release of the most recent monthly home sales and price report from the California Association of REALTORS®.

In August 2020, California’s housing market continued to improve as statewide home sales climbed to their highest level in more than a decade and median home prices set another high, breaking July’s record.

The August numbers are the latest evidence that buyers and sellers have brushed off economic uncertainty in the reality of a post-Covid-19, housing market rebound.

Existing, single-family home sales in California totaled 465,400 in August 2020 on a seasonally adjusted annualized rate, up 6.3 percent from July 2020’s sales of 437,890, and 14.6 percent higher from August 2019, when 406,100 homes were sold on an annualized basis.

It was noteworthy that August’s sales total climbed above the 400,000 level for the second straight month since the Covid-19 crisis depressed the housing market earlier this year. It was the first time since the summer of 2016 that sales increased from the previous month three months in a row.

In San Diego County, August 2020 homes sales were down 2.2 percent from July 2020, but 10.2 percent higher than August 2019.

In addition to home sales records, home prices also set a record in August 2020. The statewide median price hit another new high after setting records in June and July.

California’s median home price broke the $700,000 mark, reaching $706,900 in August 2020, a 6.1 percent jump from July 2020’s $666,320 and reflecting a year-over-year rise of 14.5 percent compared to the $617,410 price set in August 2019.

August 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Sales of higher-priced properties are recovering faster than the rest of the market, pushing upward the statewide median home price. The median price represents the point at which half of the homes sell above a price and the other half below it.

The yearly price increase was the highest recorded since March 2014 and larger than the six-month average of 4.3 percent observed between February 2020 to July 2020.

In San Diego County, the median price for a single-family home in August 2020 was $732,560, a figure which was 1.9 percent higher than the $719,000 price tag in July 2020 and 12.7 percent higher than the $650,000 amount for August 2019.

“California’s strong housing recovery in terms of sales and price over the past few months is encouraging as motivated buyers are eager to purchase homes amid the lowest interest rates ever, which led to the fastest sales growth in a decade,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “However, persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which is starting to outweigh the benefits of record low interest rates and hamper housing affordability.”

“Low rates and tight housing inventory are contributing factors to the statewide median price setting a new record high three months in a row from June to August, said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “A change in the mix of sales is another variable that keeps pushing median prices higher, as sales growth of higher-priced properties continued to outpace their more affordable counterparts.”

Reflecting the rise in home prices, consumers continue to say it is a good time to sell, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in early September, the poll found that 58 percent of consumers said it is a good time to sell, up from 54 percent a month ago, and up from 46 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 34 percent of the consumers who responded to the poll believed that now is a good time to buy a home, sharply higher than last year, when 22 percent said it was a good time to buy a home.

Other key points from the August 2020 resale housing report included:

-- Home sales at the regional level increased in all major regions from last year. The Central Coast and the San Francisco Bay Area had the strongest sales growth in August with both regions surging more than 10 percent in sales from last year. The Far North and Southern California regions increased more modestly in sales with a gain of 8.6 percent and 5.5 percent, respectively.

-- Home prices at the regional level posted double-digit price increases from last year in nearly all major regions. San Francisco Bay Area had the highest median price increase, rising 18.7 percent from last year, followed by the Central Coast (16.4%), Southern California (12.9%), and Central Valley (12.2%).

-- All but two counties reported a year-over-year gain in price, with 33 of the counties growing more than 10 percent. Santa Barbara had the highest price increase, gaining 41.7 percent year-over-year.

-- With fewer for-sale properties being added to the market, housing supply remained significantly below last year’s level. The 50.3 percent drop from a year ago was the biggest decline in active listings since at least January 2008. It was also the ninth consecutive month with active listings falling more than 25 percent from the prior year. 

-- With higher-than-normal housing demand and supply not being replenished as fast as prior to the pandemic, the Unsold Inventory index (UII) remained at the lowest level in the last 15 years. The UII fell sharply from 3.2 months in August 2019 to 2.1 months this August.

-- Housing supply tightened up in all price segments, but the housing shortage is especially pronounced in more affordable markets. While active listings in every price range declined by double-digits on a year-over-year basis, for-sale properties priced below $1 million fell 58 percent from last year. Compared to a year ago, the supply of homes priced between $1 million to $3 million declined 33.1 percent, and homes priced at or above the $3 million benchmark declined 17.2 percent.

-- The median number of days it took to sell a California single-family home was 13 days in August 2020, down from 23 days in August 2019. The August 2020 timeframe compares to 17 days in July 2020, 19 days in June 2020, 17 days in May 2020, 13 days in April 2020, 15 days in March 2020 and 23 days in February 2020.

August 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was eight days in August 2020, compared to 17 days in August 2019. The August 2020 timeframe compares to 10 days in July 2020, 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020 and 23 days in January 2020.

-- The 30-year, fixed-mortgage interest rate averaged 2.94 percent in August 2020, down from 3.62 percent in August 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.91 percent, compared to 3.36 percent in August 2019.

In other recent real estate and economic news, according to news reports:

-- Realtor.com said the number of listings in San Diego County is 43 percent lower than a year ago, according to its report for the week ending Sept. 12. Also, the median listing price is 8.8 percent higher in a year-over-year comparison.

-- CoreLogic said San Diego County’s median home price in August 2020 hit another all-time high of $640,000, up from the previous peak of $634,000 in July 2020. The real estate data reporting firm also said home prices in the county have risen more than 8 percent since March, when the Covid-19 pandemic began, and 9.4 percent since this same time last year.

-- More than 20 percent of Californians say they are bored of where they live and want to move somewhere else, according to a recent survey by Unclutterer.com, a website for home and office organization. The survey also revealed that 36 percent of city dwellers in California now want to move out to the suburbs or the country.

-- Home sales nationwide exceeded 1 million in August 2020, according to the U.S. Census Bureau and Department of Housing and Urban Development. Sales totaled 1,011,000, a 43.2 percent increase since August 2019, 4.8 percent compared to July 2020 and a record high not seen since 2006.

-- The Covid-19 pandemic has aggravated the housing’s market longstanding lack of supply, creating a historic shortage of homes for sale, reports The Wall Street Journal. Many potential home sellers are keeping their homes off the market for pandemic-related reasons. Meanwhile, buyers are accelerating purchase plans or considering homeownership for the first time to get more living space as many Americans anticipate working from home for the long term. The National Association of REALTORS® said there were 1.3 million existing single-family homes for sale at the end of July, the lowest count for any July going back to 1982. For the week ending Sept. 12, Zillow Group Inc. reports the nationwide inventory was down 29.4 percent from a year ago and the lowest level since late 2017.  

California’s housing market recovery from the coronavirus pandemic nosedive is continuing in high gear as buyers and sellers apparently have brushed off economic uncertainty, according to the most recent monthly home sales and price report from the California Association of REALTORS® (C.A.R.).

In July, home sales climbed to their highest level in more than two-and-a-half years, while median home prices set another record high. The July numbers are the latest evidence of a housing market rebound from spring, when stay-at-home orders and fears over the coronavirus slowed activity.

The state’s existing, single-family home sales totaled 437,890 in July 2020 on a seasonally adjusted annualized rate, up 28.8 percent from June 2020’s sales of 339,910, and 6.4 percent higher from July 2019, when 411,630 homes were sold.

The July sales total climbed above the 400,000 level for the first time since February, before the COVID-19 effect depressed the housing market. July 2020 also was the first time in five months that home sales posted an annual gain. Year-to-date statewide home sales were down 10 percent in July, however.

In San Diego County, July 2020 home sales were 18.1 percent higher, compared to that of June 2020, with a 10.2 percent increase since July 2019.

“A housing market trifecta of strong pent-up demand, record-low interest rates and a renewed interest in the value of homeownership bolstered July’s home sales,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “With this year’s delayed start of the homebuying season due to the pandemic, we expect home sales to remain robust in August and September, extending the season later than what’s typical.”

The median price for a single-family home in California was $666,320 for July 2020, up 6.4 percent from June 2020’s price of $626,170, and up 9.6 percent from July 2019’s price of $607,990.

July 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

In San Diego, the median price for a single-family home in San Diego County in July 2020 was $719,000, 6 percent higher than the $678,000 figure in June 2020 and 10.6 percent higher than the $650,000 figure for July 2019.

Sales of higher-priced properties contributed to a new high for the statewide median price in July 2020, after setting a previous record in June 2020. The monthly price increase was higher than the historical average change from June to July and was the highest ever recorded June-to-July change.

Sales of higher-priced properties continued to outpace sales of lower-priced homes. Homes priced below $500,000, which made up 44 percent of total sales in the California market in June 2020, only comprised 40 percent of all sales in July 2020.

Homes priced below $500,000 made up 40 percent of total sales in the state in July 2020, compared to 44 percent in June 2020. Sales of million-dollar properties increased in market share to 20.4 percent in July 2020, compared with 18.1 percent in June 2020. 

“Stronger sales of higher-priced properties continue to propel the statewide median home price, as those who tend to purchase more expensive homes are less impacted by the economic recession,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “High demand in resort communities is another variable that’s fueling the increase in home prices, as a new wave of remote workers are leaving cities in search of more space and a healthier lifestyle in what used to be the second/vacation home market.”

Reflecting the rise in home prices, a monthly Google poll conducted by C.A.R. in early August found that 54 percent of consumers said it is a good time to sell, up from 44 percent a month ago, and up from 52 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 33 percent of the consumers who responded to the poll believed that now is a good time to buy a home, sharply higher than last year, when 23 percent said it was a good time to buy a home.

Other key points from the July 2020 resale housing report include:

-- Sales increased in all major regions over last year and were particularly strong in the Central Coast region, which posted a 21.9 percent gain. Sales increased 14.8 percent in the San Francisco Bay Region, 6.6 percent in the Central Valley and 5.4 percent in Southern California. 

-- Nearly nine of ten of counties, 44 of 51 overall, experienced a year-over-year gain in closed sales in July 2020.

-- Median home prices increased in all regions in July, with both the Central Coast and San Francisco Bay Area climbing more than 10 percent from last year. The Central Valley and Southern California also grew solidly with high-single-digit increases.

-- Housing inventory continued to trend downward on a year-over-year basis, with active listings falling more than 25 percent for the eighth consecutive month. The year-over-year 48 percent decline was the biggest drop in active listings since January 2013.

-- The continued recovery in closed escrow sales, combined with a sharp drop in active listings, led to a plunge in the Unsold Inventory Index (UII) to 2.1 months in July, down from 3.2 months a year ago. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales. The July UII was the lowest level since November 2004.

-- The supply of homes for sale continued to decline significantly across the state, with all regions falling more than 30 percent in active listings from last year. Southern California had the biggest annual drop in inventory in July at 50.7 percent, which was less than half the number of sale properties from a year ago. 

July 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- The median number of days it took to sell a California single-family home was 17 days in July 2020. July’s time-frame compares to 19 days in June 2020, 17 days in May 2020, 13 days in April 2020, 15 days in March 2020, 23 days in February 2020 and 21 days in July 2019.

-- In San Diego County, the median number of days an existing, single-family home remained unsold on the market was 10 days in July 2020, which compares to 12 days in June 2020, 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020, 23 days in January 2020 and 15 days in July 2019.

-- The 30-year, fixed-mortgage interest rate averaged 3.02 percent in July, down from 3.77 percent in July 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.02 percent, compared to 3.47 percent in July 2019.

In other recent real estate and economic news, according to news reports:

-- Median home prices in San Diego hit a record high of $634,000 in July 2020, according to CoreLogic. That median price is 9.3 percent higher from same time a year ago. In June 2020, the figure hovered just over $600,000. Los Angeles, Orange and Ventura counties all saw home selling prices touch record levels. The median price of a home in the region was $585,000 in July, up 8.5 percent year-over-year and up almost $30,000 from June’s record high. It was the largest one-month price hike in CoreLogic’s 32-year-old history of tracking.

-- According to Redfin, San Diego County had the third-highest rate of competitive bids for homes in the country, trailing only Salt Lake City and San Francisco. San Diego home buyers faced competitive bids in 65 percent of the cases in July, which was down somewhat from 70 percent in June.

-- According to Zillow, San Diego County’s home inventory is down 28.4 percent year-over-year, as of the week ending Aug. 15, meaning there are more than 400,000 fewer homes listed on the market than there were a year ago. Inventory also is down in each of the 50 largest metros surveyed by Zillow from a year ago. Inventory decreased the most in Riverside (minus-46.5 percent), Baltimore (minus-43.8 percent), and Hartford, Conn. (minus-43.1 percent).

-- The median list price of a single-family home in the U.S. grew 10.1 percent year-over-year, the fastest pace of growth since January 2018, according to Realtor.com’s weekly recovery report for the week ending Aug. 15. Realtor.com also reported the price in San Diego is up about 11 percent year-over-year, while the number of active listings is down by 44 percent since last year.

-- The National Association of REALTORS® reports that 96 percent of the nation’s metropolitan areas experienced an increase in home prices in the second quarter of 2020, even in the midst of the pandemic. San Diego was the fifth most expensive metro area for housing. San Jose maintained its place as the most expensive area in the nation during the second quarter as its median price for an existing, single-family home rose 3.8 percent year-over-year to $1.38 million. Others median prices among the top five included San Francisco ($1.05 million), Anaheim ($859,000), urban Honolulu ($815,700) and San Diego ($670,000).

-- San Diego was the nation’s second least affordable housing market in June, according to First American Financial Corp.’s Real House Price Index (RHPI). The higher the RHPI score, the less affordable the home. New York City had the highest RHPI at 29.3 percent, followed by San Diego at 19.4 percent, and Pittsburgh at 15 percent.

The rebound happened over one month’s time.

In May of this year, the full impact of the coronavirus pandemic nosedived California’s home sales to their lowest level since the 2008 Great Recession.

By contrast, California’s housing market in June regained its footing with the largest month-over-month sales increase in nearly 40 years, according to the most recent monthly home sales and prices report from the California Association of REALTORS® (C.A.R.).

Statewide, June 2020 home sales were up a whopping 42.4 percent compared to May 2020. This month-over-month increase was the largest since C.A.R. began reporting monthly sales in January 1979. Closed escrow sales of existing single-family detached homes in California totaled a seasonally adjusted annualized rate of 339,910 units in June, compared to 238,740 in May. Compared to a year ago, statewide home sales were down 12.8 percent, when 389,730 homes were sold on an annualized basis.

In San Diego County, June 2020 homes sales were 58.1 percent higher when compared to May 2020, when home sales were down 14.6 percent in a comparison to April 2020. There was a nominal increase of 1.7 percent in home sales in June 2020 over June 2019.

Meanwhile, home prices remained strong in June 2020, setting another record high statewide, despite the Covid-impacted sales environment.

After dipping briefly below $600,000 in May, California’s median home price increased to $626,170 in June 2020, an improvement of 6.5 percent from $588,070 in May 2020 and 2.5 percent from $610,720 in June 2019. The monthly price increase was higher than the historical average price change from May to June and, in fact, was the highest ever recorded for a May-to-June comparison. 

A change in the mix of sales was a key factor that pushed the median price higher in June, as sales of higher-priced properties showed stronger than lower-priced homes. Homes priced below $500,000, which made up 48 percent of total sales in the California market in May 2020, only comprised 44 percent of all sales in June 2020. Sales of million-dollar and above properties, on the other hand, increased in market share to 18.1 percent in the most recent month compared with 15.6 percent in May 2020. 

In San Diego, the median price for a single-family home in San Diego County in June 2020 was $678,000, an increase of 3.5 percent from $655,000 in May 2020, and 2.0 percent higher than $665,000 in June 2019.

June 2020 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

“Home sales bounced back solidly in June after hitting a record bottom in May, as lockdown restrictions loosened and pent up demand driven by record-low interest rates roared back,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, California.

“A new record high in the statewide median price suggests that there is stronger housing demand from more qualified, affluent buyers in this extremely favorable lending environment,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “It also highlights both the affordability and supply issues created by the uneven impact of the coronavirus pandemic as the more affordable segments of the state’s housing market are recovering at a slower pace.”

Reflecting growing confidence in market conditions, a monthly Google poll conducted by C.A.R. in early July found that 44 percent of consumer respondents stated it is a good time to sell, up from 40 percent a month ago, but down from 49 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying. 31 percent of the consumers who responded to the poll believe that now is a good time to buy a home, a sharply higher figure than last year’s 23 percent of respondents.

Other key points from the June 2020 resale housing report include:

-- Median prices increased in all regions in June, with the more affordable markets increasing year-over-year in the high-single digits. The Bay Area and the Central Coast regions, which experienced dips in price in May, bounced back in June with moderate increases of 4.2 percent and 5.4 percent, respectively. Median prices in the Central Valley and the Southern California continued to rise from last year by 7.4 percent and 3.3 percent, respectively, as pent-up demand returned to the market.

-- Housing supply continued to trend downward on a year-over-year basis, with active listings falling more than 25 percent for the seventh consecutive month. A sizable year-over-year drop in active listings of 43 percent, coupled with a robust gain in closed sales, led to a decline in C.A.R.’s Unsold Inventory Index (UII) in June. The Index dropped to 2.7 months in June from 4.3 months in May and was down from 3.4 months in June 2019. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.

-- Housing supply continued to decline significantly across the state, with all areas falling more than 30 percent in active listings from last year. Southern California had the biggest drop in supply, with for-sale properties plunging 47.3 percent year-over-year.  While all counties in the region dropped at least 40 percent from a year ago, both Riverside and San Bernardino plummeted more than 50 percent in active listings.

-- The median number of days it took to sell a California single-family home was 19 days in June 2020, equal to that of June 2019. June 2020’s 19-day figure compares to 17 days in May 2020, 13 days in April 2020, 15 days in March 2020 and 23 days in February 2020.

June 2020 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- In San Diego County, the median number of days an existing single-family home remained unsold on the market was 12 days in June 2020, which compares to 11 days in May 2020, eight days in April 2020, 10 days in March 2020, 12 days in February 2020, 23 days in January 2020 and 13 days in June 2019.

-- The 30-year, fixed-mortgage interest rate averaged 3.16 percent in June, down from 3.80 percent in June 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate averaged 3.09 percent, compared to 3.48 percent in June 2019.

In other recent real estate and economic news, according to news reports:

-- According to CoreLogic, the median home price in San Diego reached a new high of $600,250 in June, indicating that COVID-19 has not stopped the upward pressure on home prices. San Diego was not alone in this trend, with three of the six Southern California counties reaching record price peaks in June.

-- According to Zillow, the median price of a single-family home in San Diego County rose 5 percent year-over-year in June to $636,815 while inventory experienced a 27.6 percent year-over-year decline. Nationally, home values continued their steady, upward trajectory in June, growing 4.3 percent year-over-year to $252,178. Phoenix is the hottest top-50 market, reported Zillow. Home values in the Arizona city rose 9.6 percent year-over-year in June, followed by Birmingham, Ala. (up 7.6 percent) and Memphis, Tenn. (up 7.5 percent).

-- Home prices are expected to increase through the summer, including in San Diego County, which has the second-highest year-over-year price increase behind New York City, according to First American Financial Corp. The five markets with the greatest year-over-year increase based on First American’s Real House Price Index include New York (14.8 percent), San Diego (10.1 percent), Pittsburgh (8.8 percent), Orlando (6.3 percent), and St. Louis (5.4 percent).

-- The Covid pandemic is not affecting home sales, according to Realtor.com, which said monthly traffic hit an all-time high of 86 million unique users in June, breaking May’s record of 85 million users. Supply still remains the biggest factor slowing the recovery, however, as total listings remain 31 percent lower than last year.

-- Although buyers appeared to regain confidence in June, sellers lagged behind as new listings slumped during the month, according to Realtor.com’s June Monthly Housing Trends report. In the San Diego-Carlsbad market, new listings dropped by 21 percent in June 2020, compared to June 2019, and the year-over-year, “active listing count” decreased by 36.6 percent. Nationally, housing inventory across the U.S. was down 27.4 percent year over year in June. The national volume of new listings was down by 19.3 percent from last year, which actually represented an improvement from declines of 44.1 percent in April and 29.4 percent in May.

-- Bidding wars for homes are increasing in San Diego. According to Redfin, 65.7 percent of home offers in June faced multiple competitive offers. San Diego was the second most competitive market in the country in June, trailing only Boston, which had 72.4 percent of homes fielding multiple bids.

-- The total value of residential real estate in San Diego County is $564 billion, according to a recent LendingTree report. For perspective, this figure is comparable to the value of Warren Buffet’s Berkshire Hathaway firm or the GDP of Poland., San Diego’s total is the 12th highest in the U.S.New York City is top-rated at $2.8 trillion, which is more than the GDP of the United Kingdom in 2019. Los Angeles, with $2.3 trillion, has the second-highest residential real estate value in the U.S. nearly the GDP of Italy and the combined value of Amazon and Google’s parent company Alphabet. San Francisco is third at $1.3 trillion, the equivalent of Mexico’s GDP or the value of Microsoft.