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Yo_Mama_Been_Loggin

(107,111 posts)
Tue Jul 24, 2018, 09:45 PM Jul 2018

Southern California home sales crash in warning sign to nation

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped by 11.8 percent year over year as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange Counties.

Sales fell 1.1 percent compared with May, but the average change from May to June, going back to 1988, is a 6 percent gain.

The weakness was especially apparent in sales of newly built homes, which were 47 percent below the June average. Part of that is that builders are putting up fewer homes, so there is simply less to sell.

“A portion of last month’s year-over-year sales decline reflects one less business day for deals to be recorded compared with June 2017,” noted Andrew LePage, a CoreLogic analyst. “But affordability and inventory constraints are likely the main culprits in last month’s sales slowdown, which applied to all six of the region’s counties and across most of the major price categories.”

https://www.msn.com/en-us/money/realestate/southern-california-home-sales-crash-in-warning-sign-to-nation/ar-AAAmrd4?li=BBnb7Kz

2008 says hello

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Southern California home sales crash in warning sign to nation (Original Post) Yo_Mama_Been_Loggin Jul 2018 OP
The headline is a little misleading, since most people think of prices when they spooky3 Jul 2018 #1
The logical conclusion is that lower prices should follow, right? Tiggeroshii Jul 2018 #4
No, not if supply stays low. nt spooky3 Jul 2018 #6
Not necessarily. Mariana Jul 2018 #10
Oh okay. So they might just rise slower... Tiggeroshii Jul 2018 #13
Inventory is for a fairly low also uponit7771 Jul 2018 #17
Yes, that's what I meant by owners' not listing their houses. spooky3 Jul 2018 #18
It's called the Trump tax bill BeyondGeography Jul 2018 #2
It's a recipe for secession movements. roamer65 Jul 2018 #8
The mortgage deduction is 750k now, but I think that's not the main culprit here CreekDog Jul 2018 #11
The SALT cap is certainly the killer in NY BeyondGeography Jul 2018 #15
There are two houses on my street that are listed kimbutgar Jul 2018 #3
Our CA house was listed at 9 AM and a contract signed at 10AM SoCalDem Jul 2018 #14
One of the houses needs some major upgrades and the other was slightly remodeled kimbutgar Jul 2018 #16
At some point doesn't reality have to step up dembotoz Jul 2018 #5
I agree. Certainly not a mortgage at compound interest. Volaris Jul 2018 #7
when your job, your family, your kids, your parents are here CreekDog Jul 2018 #12
When California sneezes... Xolodno Jul 2018 #9
2 million dollar home in East Los Angeles listed today highmindedhavi Jul 2018 #19
Wow, one of those sold for 599,000 in May 2018! R B Garr Jul 2018 #20

spooky3

(34,303 posts)
1. The headline is a little misleading, since most people think of prices when they
Tue Jul 24, 2018, 09:48 PM
Jul 2018

hear "crash." This article reports that prices are going "up to a record high" but the # of homes sold has declined a lot. That's happening in a lot of places primarily because owners aren't listing, and prices are too high for many would-be buyers.

 

Tiggeroshii

(11,088 posts)
4. The logical conclusion is that lower prices should follow, right?
Tue Jul 24, 2018, 10:00 PM
Jul 2018

Or will prices keep going up even though people arent buying?

BeyondGeography

(39,284 posts)
2. It's called the Trump tax bill
Tue Jul 24, 2018, 09:49 PM
Jul 2018

$500k cap on mortgage interest and $10K on state and local taxes. Kills the deep blue bicoastal areas that didn't vote for him.

CreekDog

(46,192 posts)
11. The mortgage deduction is 750k now, but I think that's not the main culprit here
Wed Jul 25, 2018, 02:22 AM
Jul 2018

The 10k cap on State and Local taxes really changes the affordability picture.

a 750k house will have property taxes about $8000/year. Prior to this, it was fully deductible which for someone in the 25% tax bracket, would make those taxes equal to $6000/year.

Now the cap will apply to the combined state income and property taxes and even those who aren't necessarily highly paid will hit that cap before they've paid much property tax.

And before anyone scoffs at homebuyers here, because of their income, keep in mind that a lot of us couldn't find rentals or if we could, would be priced out of them in a matter of years.

So buying a house, whatever one has to do, with a flat rate mortgage, keeps one's mortgage payment locked for the life of the loan. It is the only thing that keeps people whose wages don't rise as fast as rents or home prices here housed. Everyone should have housing stability, not just those that can afford it because they bought 10, 20, 30 years ago.

BeyondGeography

(39,284 posts)
15. The SALT cap is certainly the killer in NY
Wed Jul 25, 2018, 07:03 AM
Jul 2018

We have fairly middle-of-the-road million dollar homes in the burbs here with $30k-plus property tax bills, not to mention the income you need to generate in order to afford that. Absent a repeal of this bill (workarounds have been discussed but it’s not that easy), the tax bill will torpedo the property market here, and not just at the higher levels. Many middle class people will be on the wrong side of that cap.

kimbutgar

(20,882 posts)
3. There are two houses on my street that are listed
Tue Jul 24, 2018, 09:55 PM
Jul 2018

Usually homes sell on the first weekend showing. Not for theses homes that you got to put money into to improve. People with money are getting cautious and nervous.

SoCalDem

(103,856 posts)
14. Our CA house was listed at 9 AM and a contract signed at 10AM
Wed Jul 25, 2018, 02:52 AM
Jul 2018

It was also the highest price in that neighborhood in a long time...
Of course it was worth every penny... totally remodeled with top of the line appliances..and 20" travertine flooring throughout..

kimbutgar

(20,882 posts)
16. One of the houses needs some major upgrades and the other was slightly remodeled
Wed Jul 25, 2018, 11:13 AM
Jul 2018

My neighborhood is ususlly hot because it’s close to the freeways and public transportation is in walking distance and there is a good neighborhood elementary school.

This is not usual for this neighborhood.

Volaris

(10,260 posts)
7. I agree. Certainly not a mortgage at compound interest.
Tue Jul 24, 2018, 11:22 PM
Jul 2018

HUD should invest a lot of money in putting people into home loans for SIMPLE INTEREST. it would turbocharge the economy and reduce overall rent rates as an added bonus. Only problem is are there enough houses that can be picked up for cheap?, and the answer in 2008 was YES, but we let the damn banks keep them all...dumb of us (and of obama, I think, but he was listening to Geithner so of course that's what happened).

CreekDog

(46,192 posts)
12. when your job, your family, your kids, your parents are here
Wed Jul 25, 2018, 02:24 AM
Jul 2018

what the hell do you expect?

you just act like we can up and leave because it's not a good deal here.

GET REAL. I didn't tell you to abandon your job and your family just because of housing prices where you live.

Xolodno

(6,341 posts)
9. When California sneezes...
Wed Jul 25, 2018, 12:23 AM
Jul 2018

...the nation catches a cold.

Continuing rising prices on homes is not sustainable.

R B Garr

(16,920 posts)
20. Wow, one of those sold for 599,000 in May 2018!
Wed Jul 25, 2018, 02:44 PM
Jul 2018

They want almost $300,000 more for it now. That is one huge profit flip.

The flippers really drive the prices up. It’s hard to find entry level condos without competing with all cash flippers. Even the higher end homes get a lot of all cash offers.

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