MARKET NEWS AND DATA
Yucaipa Market Report - December
Inventory rose sharply in December with sellers deciding it was time to sell. At 4.3 months inventory we are still below a balanced market of 6 month.
Closed sales were down 30% and the median days on market rose to 78 days.
Pending sales did however rise 12.5% which may be a sign of increasing buyer activity. Next month will be interesting to see if this trend continues.
It still remains a good time to sell as inventory, while increasing, remains low.
Yucaipa Market Report - October
Traffic levels within our index rose to 14 in October vs. a reading of 8 in September, indicating trends worse than seasonal expectations.
Home prices declined during the month. Our Price Index registered a reading of 43 vs. 25 in the prior period.
The number of home listings increased during the month (a reading of 29), while the time to sell also increased (a reading of 29).
Traffic Worsens in October:
Our Buyer Traffic Index declined in October to a reading of 24, down 12 pts from 36 in September, indicating traffic trends well below normal seasonal expectations. Agents across markets widely cited higher mortgage rates as exacerbating affordability challenges given already elevated home prices. Moreover, agents highlighted widespread inventory build across most regions, while the average time to sell continued to lengthen across every region. The transition into a “buyer’s market” was a common theme among agents, and the result is pricing continues to decelerate and in many markets declined sequentially. Notably, agents observed inventory build and price reductions much more so at higher price points, while inventory at entry-level price points is still seen as tight, and this price point also happens to be where demand is stronger. This disconnect was seen to be frustrating potential entry-level buyers amidst the rising rate environment. Beyond rates and home prices, agents highlighted mid-term election uncertainty as well as tax-related concerns in specific markets as suppressing traffic.
Traffic Declines More Widespread in October vs. September: In October, 2 of 40 markets surveyed saw better-than-expected traffic (6 in September), 2 saw traffic in-line with expectations (7 in September), and 36 saw lower than expected traffic (27 in September). California remained weak (-7 pts m/m to 22), with notable softness in Los Angeles (a reading of 11), the Inland Empire (14), Sacramento (19), San Diego (22), and San Francisco (23). The Southwest (-27) and Mid-Atlantic (-24) regions had the most significant monthly decline among regions.
Prices Down Sequentially:
Our Home Price Index registered a 43 reading in September, down 6 pts from September and indicating pricing softened sequentially. Of the 40 markets surveyed, 10 saw higher prices m/m (14 in September), 8 experienced flat prices (9 in September), and 22 saw lower prices (17 in September). Agents in only 1 market (Charleston, SC) uniformly indicated that they saw higher prices sequentially (also 1 in September).