S. CALIFORNIA OUTLOOK
In the new home market, lack of supply continues to keep total sales down. As of the end of the third quarter 2015, there were just 79 actively selling new home projects in the entire county, 62 percent below the average of the last 27 years (206 projects). VENTURA A strong rebound in job growth last year (+6,700 year-over-year as of October versus +3,800 at the same time a year prior), declining unemployment (cur- rently at 5.4 percent versus 6.4 percent a year ago) and one of the highest rates of wage growth in Southern California (+2.8 percent year-over-year) are driving the demand for housing. Resale activity was up 15 percent year- over-year in October, and resale prices were up 5.9 percent year-over-year in November, compared to 5.2 percent a year earlier. Lack of supply is holding sales back in the new home market. As the end of 2015 neared, there were only 15 actively selling projects in all of Ventura County com- pared to a historical average of 71 active projects since 1988. INLAND EMPIRE (RIVERSIDE AND SAN BERNARDINO COUNTIES COMBINED) A continued widening of the gap in home prices between the less expensive Inland Empire region (median resale $280,000) and the pricier Coastal South- ern California counties (Los Angeles: $505,000; Orange: $662,000; San Di- ego: $503,000) is starting to push more prospective home buyers to the Inland Empire. Lower gas prices are also helping ease the burden of longer commute times and are starting to help reignite some of the “drive to qualify” markets such as Beaumont, Perris and Hemet. After 22 straight months of declining or flat resale activity from October 2013 through July 2015, year-over-year resales started to rise in August 2015 (+2.6
THERE’S WIDE VARIETY IN THE ECONOMIC OUTLOOK OF SOUTHERN CALIFORNIA’S SIX MAJOR MARKETS. Ups, Downs and In-Betweens
by Pete Reeb
ur outlook for 2016 varies dramat- ically by market and price point in Southern California. At a high level, there are three major markets on the upswing, one is holding its own, and two are show- ing signs of slowing. O MARKETS ONTHE UPSWING: STRONGERMOMENTUM SAN DIEGO Major indicators are trending positive. Housing demand is up, thanks to increas- ing job growth (current +40,000 year- over-year versus +31,000 at this time last year), declining unemployment (current 4.8 percent versus 6.0 percent a year ago) and rising wages (current +2.1 percent).
Demand drivers are once again pushing increasing home sales. After 16 straight months of declining year-over-year resales through June 2015, year-over-year resale activity turned posi- tive in July and has been increasing every month since then: July 2015 +3.7 percent year-over-year, August +6.6 percent year-over-year, September +7.5 percent year-over-year, October +8.0 percent year-over-year. Rising year-over-year sales activity and a year-over-year decline in listings is pushing resale prices up. The Burns Home Value Index™ for resales was up 6.4 percent in November 2015 year-over-year compared to a 4.6 percent increase at the same time a year ago.
92 | think realty magazine | mar :: apr 2016
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