Below is a recording of our Bridge AOR Virtual Town Hall Meeting on May 19, 2020.
California Economic & Housing Market Update with Jordan Levine, C.A.R. Deputy Chief Economist
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For release: May 18, 2020 California housing market feels full brunt of coronavirus outbreak in April, C.A.R. reports
- Existing, single-family home sales totaled 277,440 in April on a seasonally adjusted annualized rate, down 25.6 percent from March and down 30.1 percent from April 2019.
- April’s statewide median home price was $606,410, down 1.0 percent from March and up 0.6 percent from April 2019.
- Year-to-date statewide home sales were down 5.4 percent in April.
LOS ANGELES (May 18) – California home sales dropped sharply in April from both the previous month and year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 277,440 units in April, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2020 if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. April’s sales total was down 25.6 percent from the 373,070 level in March and down 30.1 percent from a year ago. It was the first time home sales dropped below the 300,000 level since March 2008, and the month-to-month drop was the largest since at least 1979, when C.A.R. began tracking this data. Additionally, the year-over-year decline was the first double-digit loss in 15 months and the largest decrease since December 2007. “As expected, California home sales experienced the worst month-to-month sales decline in more than four decades as the coronavirus pandemic prompted stay-at-home orders, which kept both buyers and sellers on the sidelines,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “While some economic activity will resume as the state gradually reopens, the housing market is expected to remain sluggish for the next couple of months as potential market participants deal with the impact of stay-in-place restrictions.” While the statewide median price remained above the $600,000 benchmark for the second consecutive month in April, price growth showed clear signs of softening when compared to the past six months. The April statewide median price of $606,410 for existing single-family homes in the state dipped 1.0 percent from March, and the 0.6 percent gain was essentially flat from April 2019, when the median price was $603,030. The year-over-year price gain was substantially smaller than the six-month average gain of 7.8 percent recorded between October 2019 and March 2020.
“With the recession-level decline in closed home sales, the statewide median price was just barely able to avoid going into negative territory in April, in part because high-end homes saw the biggest sales declines,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Even with tight supply and low interest rates, home prices will continue to be tested by economic deterioration in the short term.”
Reflecting the dramatic change in market conditions, a monthly Google poll conducted by C.A.R. in early April found nearly one-third (29 percent) of consumers said it is a good time to sell, up from 26 percent a month ago, but down from 45 percent a year ago. The market uncertainty has not curbed the optimism for homebuying as much; 31 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 C.A.R.’s April 2020 resale housing report include:
At the regional level, all major regions dipped in sales by more than 25 percent from last year, with the Bay Area dropping the most at -37.4 percent, followed by the Central Coast (-31.6 percent), Southern California (-30.2 percent), and the Central Valley (-26.1 percent).
Forty-seven of the 51 counties tracked by C.A.R. recorded a year-over-year sales loss in April, with Mono declining the most from last year at -62.5 percent, followed by Marin (-60.6 percent), and San Francisco (-52.8 percent). Counties that experienced a sales decline from last year averaged a loss of 29.1 percent from the previous year. Four counties increased in sales from last year, with Del Norte growing the most at 21.1 percent, followed by Kings (13 percent), Mariposa (8.3 percent), and Lake (3.4 percent).
Median prices dipped in April from a year ago in the Central Coast (-6.1 percent) and the Bay Area (-0.8 percent) but increased modestly in both the Central Valley (4.8 percent) and in Southern California (3.5 percent).
Thirty-nine of the 51 counties tracked by C.A.R. reported a year-over-year price gain in April, with Siskiyou growing the most at 24.8 percent. Of the 12 counties that experienced a price drop from last April, Plumas had the biggest decline of 36.1 percent.
C.A.R.’s Unsold inventory Index jumped to 3.4 months in April from 2.7 months in March and was unchanged from last April. 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.
Total active listings continued to decline on a year-over-year basis for the 10th consecutive month, and the 25 percent decrease in listings was consistent with what has been observed before the shutdown.
The median number of days it took to sell a California single-family home fell significantly from a year ago, declining from 21 days in April 2019 to 13 days in April 2020.
C.A.R.’s statewide sales-price-to-list-price ratio* was 100 percent in April 2020, up from 98.9 in April 2019.
The statewide average price per square foot** for an existing single-family home was $284 in April 2020 and $289 in April 2019.
The 30-year, fixed-mortgage interest rate averaged 3.31 percent in April, down from 4.14 percent in April 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.31 percent, compared to 3.75 percent in April 2019.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.
*Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 50 counties.
Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS®(www.car.org) is one of the largest state trade organizations in the United States with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
Shelter-in-Place and Real Estate Transactions
The Order of April 29, 2020 EFFECTIVE 11:59 pm May 3, 2020
Questions and Answers
(As of May 13, 2020)
The information contained herein does not constitute legal advice. Please check the County/City Orders and FAQs for any changes and updates
Always check with your broker before undertaking any activity related to the sale of property. If questions arise consult your broker, and with the broker’s consent, legal counsel What does the new Order allow with regard to real estate services? The new Order provides in summary as follows: 1. Service Providers that enable real estate transactions are included in the excepted services 2. Service providers include real estate agents, escrow agents, notaries and title companies, (see below for additional information on service providers*) 3. Appointments and viewing are to occur virtually 4. If a virtual viewing is not feasible, viewings must be by appointment with no more than two people from the same household or living unit and one individual showing the unit. 5. Commercial real estate activities are permissible if performed within the rules of the Order. Service providers also include inspectors, appraisers, photographers/videographers, AND stagers. Does the new Order allow for staging and stagers? Yes
Can properties be viewed by a family of more than two people at the same time? No. The Order allows only two people from the same household to accompany the agent during a showing. Can brokers and agents conduct Live Open Houses or Broker Tours? No. Marketing preview tours, caravans and other similar visits are not permitted. When should the PEAD be signed? According to C.A.R. and subject to the direction of your broker, the C.A.R. PEAD form, the latest of which is dated April 30, 2020, should be completed each time there is an entry into the property, irrespective as to whether it is occupied or vacant. It should be signed by all service providers, buyers, or anyone else entering the home; and it should also be signed by the seller for each entry.
Can a listing agent visit the property to conduct the visual inspection required by California Civil Code, Section 2079? Yes. Because it is not feasible to complete the mandated visual inspection and completion of the Agent’s portion of the Transfer Disclosure Statement, an agent may visit the property to complete the statutory requirements. The C.A.R. AVID Form is available for agents wishing to do this. Agents should consult with their brokers concerning the conducting of any inspections and use of the AVID Forms.
Can a buyer visit the property after the execution of a Purchase and Sale Agreement for the purpose of fulfilling the buyer’s obligation to conduct inspections as allowed by California Civil Code, Section 1102.6? Yes. In performing any such inspections, the agent must accompany the buyer to assure the health and sanitation protocols are followed.
What are the protocols for viewing a property?
1. Compliance with Social Distancing Requirements of Section 16.k of the Order
2. Following the directives of public agencies for sanitation and health, including avoiding the touching of surfaces and wiping any touched surfaces with disinfectants.
3. Following the directives of the Order issued April 17, 2020 pertaining face coverings
4. Follow the directions of your broker.
Can a listing agent schedule back to back appointments to show a listed property?
Yes, under certain conditions. Any person coming to view a property must have previously made arrangements through the appointment process referenced in the Order. Only two persons of the same household or living unit may be on the property at the same time. The viewing can be accomplished only if a virtual viewing is not feasible. Only one agent can be on the premises at a given time and the buyer’s agent should access the property through a lockbox or other secure method. The listing agent and buyer’s agent cannot be on the property at the same time.
What are the protocols for showing properties occupied by tenants? The same protocols in effect for occupied properties apply to properties occupied by tenants. Tenants must not be present when properties they occupy are shown. The coordination of gaining access to a property occupied by a tenant is the responsibility of the seller and must be obtained in accordance with any applicable provisions of local laws and a written lease between the tenant and seller.
If furniture was staged before May 4, 2020 and the property sells, how can the stager retrieve their furniture? Furniture may be removed by the stager at any time provided all protocols for sanitation and health are followed. Can inspectors conduct home inspections? Yes. As with any other viewing, all of the health and sanitary protocols must be followed. Can appraisers conduct in-person appraisals? Yes. If an appraisal is required in a pending transaction, an appraisal may be conducted subject adhering to social distancing guidelines established by the County. The appraisal should be conducted as expeditiously as possible. Sellers must vacate the property prior to the appraisal.
Can buyer’s agent conduct “buyer walk-throughs” prior to closing? Yes. If a walk-through is required in a pending transaction, a walk-through may be conducted, provided that it is by appointment, a total of no more than two people from the same household or living unit, and the agent are at the property at any one time, and they all adhere to social distancing guidelines established by the County. The walk-though should be conducted as expeditiously as possible. Sellers should vacate the property prior to the walk-through.
Can professional photographers take photos and create virtual tours during the effective period of the Order? Yes. Information concerning real estate services indicates that professional photography for listings is permitted. Like all other in-person activities, photos and virtual tours must be by appointment, a total of no more than one photographer may be at property at any one time, and the photographer must adhere to social distancing guidelines established by the County. Sellers must vacate the property prior to any photography activities.
How much time should a seller be gone from the property before a viewing and how much time needs to elapse before a seller returns to a residence after the viewing or service provider leaves? There is no scientifically accepted measure, however, there should be sufficient time between the time the seller leaves and the viewer or service provider arrives. Likewise, after the viewer or service provider leaves, the seller should allow sufficient time before returning to the property.
Do listing agents need to remove lock boxes from Active listings? No. Lockboxes may stay on Active listings, as previews and showings are permitted by appointment only, if a total of no more than two people residing in the same household or living unit and the agent are at the property at any one time, and they adhere to social distancing guidelines established by the County.
Can moving companies move buyers into a property and move sellers out of a property? Yes. The new Order specially recognizes the role of movers in a real estate transaction. The same protocols and rules apply to movers. All moving work should be conducted with the fewest employees possible and follow social distancing and sanitation measures.
Can agents install for-sale signs at a property during the Order? Yes. Agents are permitted to install for-sale signs, provided that the sign is installed adhering to social distancing guidelines established by the County.
Can my landscaper/arborist/gardener continue to maintain my yard? Yes. Arborists, landscapers, gardeners, and similar service professionals can operate as outdoor businesses, as that term is defined in the new Order, but they must strictly comply with social distancing requirements.
Can home service workers continue to provide their services? Home service workers can keep providing services in homes if they are essential to health, safety, sanitation, or the necessary operation of the home. This includes plumbers, electricians, exterminators, and other services needed to maintain a safe and sanitary home. Home construction and repair work is also allowed, as is home-based care for children, adults, seniors, and pets.
Can we bring in sanitizing and cleaning services to clean/disinfect homes? Yes. Service providers that are necessary to maintain habitability, sanitation or operation of the residence are permissible under the new Order.
If I see a violation what do I do? Consult with your broker. The appropriate law enforcement agency is vested with the responsibility for enforcing the law. The Bridge Association of REALTORS® is not a law enforcement agency and cannot legally engage in any enforcement activities.
Where can I get more information? The Order is available at http://www.acphd.org/media/572718/health-officer-order-20-10-shelter-in-place-20200429.pdf
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