With each leading indicator showing a decline in growth and REALTORS® becoming less optimistic about market expectations, the signs point to a seasonal slowdown in the housing market. However, when compared to the same time a year ago, the housing market is performing better.
Market Conditions • The floor calls index dipped below 50 for the third straight month, indicating a decline in activity. The index was 41 for October, and it was down from 49 last month but up from 40 last year. • After the seventh straight decline, the listing appointments and client presentations index dipped below 50 indicating a slowdown. The index is down to 41 this month from 46 last month, but up slightly from 41 a year ago. • The open house traffic index dipped into negative territory after rebounding last month. In October, the index was 47, down from 52 last month but up from 45 last year. • The all cash purchases index stayed declined to 38, down from last month at 43 but it is slightly higher from last year’s 37. The continued decline is indicating that all cash purchases are less prevalent than at the beginning of the year. • A lack of inventory was the number one concern among California REALTORS® with 26% of respondents indicated it was their biggest concerned. Followed by affordability (22%) and inflated home prices (18%). • REALTOR® optimism about market conditions over the next year stayed flat from last month at 54 but it is down from 57 last year. This was the first time since November 2015 where half of REALTORS® expected market conditions will remain the same indicating the market is leveling off.
Last Transaction • The percentage of properties selling below asking price increased to 44% from 40% last month but decreased from 47% last year. Conversely, the percentage of properties selling above asking price decreased from 31% last month to 28% this month but increased from 27% last year. The percentage of properties selling at asking price decreased to 28% this month from 31% last month and 27% from a year ago. The net percentage of properties sold below asking price to 16%, indicating that more properties are selling below asking price than above or at asking price. • For the 28% of properties selling above asking price, the average premium paid over asking increased to 7.1% from 7.7% last month and 8.9% last year. • For the 44% of properties selling below asking price, the average percentage paid below asking price declined to 8.9% from last month and last year, both at 12%. • Fewer properties received multiple offers, down from 63% last month to 59% this month. The proportion of properties with three or more offers declined to 30%, which is the lowest since December 2014. The average number of offers per property declined to 2.3 from 2.6 last month and 2.4 a year ago. • The proportion of homes that had listing price reductions increased to 31% this month from 25% last month but down slightly from 32% a year ago.