Worst time to sell California home in 17 months – Daily News

on Aug25
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“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: Californians say it’s the worst time to sell a home in 17 months, a key factor behind a dramatic slowdown in homebuying.

Source: My trusty spreadsheet looked into the California Association of Realtors’ monthly poll on homebuying sentiment.


The poll results help define the housing market’s quickly deflating excitement.

Is it a good time to sell? Well, 60% of Californians polled said “yes” in July, down from 74% back in the feeding frenzy days of last December.

On the other side of the coin, 16% said it was a good time to buy — down from 22% at the end of 2021.

The details

Back in February 2021 — 17 months ago — 60% also said it was a good time to sell.

That poll result was good news then because it marked a sharp rebound from a 26% bottom in locked-down April 2020. Obviously, the 30-year mortgage rate hitting its 2.65% all-time low to start 2021 helped juice the buying climate.

Bubble watch: Half of California homes 10% or more overvalued

And it’s no coincidence that historically low rates were followed by 28% saying it was a “good time to buy” in February 2021. That’s a level of buying zeal that hasn’t been topped since.

Fast forward to the summer of 2022. This same 60% selling optimism is part of a downswing. But the good-time-to-buy crowd isn’t biting. The poll’s buying enthusiasts are roughly half the size of February 2021.

Such diminished passions for buying AND selling translated to plummeting home sales this summer. Ponder the ugly numbers in the July homebuying report by California Realtors.

Sales of single-family houses fell 14% from June — the fourth-largest one-month drop since 1990. That left July’s homebuying down 31% over 12 months — the ninth-largest one-year fall in 32 years.

So is it any surprise why prices are falling? Yes, falling.

California’s $833,910 median sales price for a house in July was off 7% from May’s all-time high — but still up 37% in three years. Southern California’s $808,000 median was off 4% from its peak but  41% above 2019. And the Bay Area’s $1.3 million price was 16% from its top but 37% above 2019.

Why the summertime swoon? Perhaps those who needed more living space in the pandemic era already bought a home. Don’t forget July’s mortgage rate was 5.4%, double the record low. Meanwhile, prices surged so fast that homes in half of California metro areas are overvalued by 10% or more, according to Wall Street’s Fitch Ratings.

Another view

Homebuying enthusiasm is dropping across the nation.

In July, 4.4% of Americans polled by the Conference Board said they were planning to buy a home in the next six months. That’s down from 5.7% in June, 6.9% in December, and 7.5% back in February 2021.

U.S. home sales in July fell to their slowest pace since November 2015, excluding the 2020 locked-down market, according to the National Association of Realtors.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … THREE BUBBLES!

I’m always amazed how swiftly markets for any asset can turn — up or down.

This summer, house hunters had their moment of clarity and decided that there’s no more need to rush to buy. This wait-and-see attitude may help take some of the sizzle out of obviously supercharged prices.

The question mark now is how sellers react to a sudden dearth of demand despite industry insiders’ insistence that “it was different” this time. Remember the promised wave of ownership wannabees ready to pounce on any buying opportunity?


Growing price cuts on listings is a sign that sellers are getting the “it’s NOW different” message.

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