California Housing Market Pukes: As Sales Collapse (San Diego County -41%), Prices Begin to Swoon

San Francisco Silicon Valley lead. Southern California is catching up. In Los Angeles County, prices fell in July from June for the first since Adam and Eve.

By Wolf Richter for WOLF STREET.

It’s peak home-buying season in California, but sky-high home prices, holy-moly mortgage rates, the collapse of cryptos, the vanishing DeFi, and the implosion of tech startups, SPACs, and IPOs, all of which are crucial to the wealth, or perceived wealth, of many Californians, pulled the rug out from under California’s splendid housing markets.

Sales volume of single-family houses (SFH) in California plunged by 14% in July from June, seasonally adjusted, and by 31% from a year ago, the 13th month in a row of year-over-year declines, according to the California Association of Realtors.

Sales volume of condos plunged by 18% in July from June, and by 36% from a year ago.

Prices eventually follow volume: The median price of single-family houses dropped 3.5% in July from June, down for the second month in a row, slashing the year-over-year gain to just 2.8%. The median price of condos dropped 2.3%, down for the third month in a row, whittling down the year-over-year gain to 7.5%.

San Francisco and Silicon Valley lead with the declines.

Sales volume of houses and condos in the entire San Francisco Bay Area has collapsed by 37% from a year ago.

Price has started to follow volume. Year-over-year, the median price of houses across the Bay Area was down for the first time since lockdown May 2020.

Year-over-year, it was down in three of the five big counties that cover San Francisco, Silicon Valley, and part of the East Bay, led by San Francisco, where the median price was down 8.2% year-over-year. We’ll get to the charts in a moment.

Southern California is behind but catching up.

Sales volume of houses plunged by 20% from June, and by 37% from a year ago. In San Diego, sales volume collapsed by 21% in July from June and by 41% year-over-year. In Orange County, sales volume collapsed by 39% year-over-year, in Los Angeles County by 32%.

Price eventually follows volume, even in Southern California. In the counties of San Diego and Orange, the median price dropped for the third month in a row.

In Los Angeles County, the median price had peaked in September 2021 and has been on a wild ride since, up and down. But in July it fell, which was a bummer because it always rises from June to July; it even rose in 2009 from June to July, when all heck had broken loose, which puts this drop in a special light.

Supply and median time on the market jump.

In all of California, supply of houses and condos for sale rose to 3.2 months, up from 1.9 months a year ago, and the highest level since May 2020.

The median time on the market jumped to 14 days in July, up from 11 days in June, and up from 8 days a year ago.

In the Bay Area, supply jumped to 2.5 months in July, up from 2.0 months in June, and up from 1.5 months in July last year.

The median time on the market jumped to 15 days in July, up from 12 days in June, and up from 10 days a year ago.

In Southern California, supply jumped to 3.3 months, up from 2.5 months in June, and up from 1.9 months in July last year.

The median time on the market jumped to 13 days in July, up from 10 days in June, and up from 8 days a year ago.

Median Prices of SFH the Biggest Counties.

Median prices are very volatile, and we need to look at them with a good dose of circumspection, and trends need to be confirmed over time. But when the median price is down so far that the huge year-over-year gains in prior periods get whittled down to just small gains or even year-over-year declines, then the data points are starting to acquire heft as trends. And that’s what we’re now starting to see.

The Bay Area leads in price declines.

In the overall San Francisco Bay Area, the median price of single-family houses dropped for the third month in a row in July, is down 15.5% from the peak, and down 0.1% from a year ago, down year-over-year for the first time since lockdown May:

02f99 US california housing CAR 2022 08 19 Bay Area California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In San Francisco, house prices fell for the third month in a row, are down 17% from the peak and are down 8% year-over-year. These are very large and sudden declines, especially in June and July, and it rolled the median price back to where it first was in February 2018:

02f99 US california housing CAR 2022 08 19 San Francisco  California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In San Mateo County, the northern part of Silicon Valley, the median price also fell for the third month in a row, -18% from the peak and -7% year-over-year. These are large and sudden drops that took the median price back to where it had first been in March 2021:

02f99 US california housing CAR 2022 08 19 San Mateo California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In Santa Clara County, which includes the southern part of Silicon Valley, the median price also fell for the third month in a row, -12% from the peak, but still +4% year-over-year, compared to the 20% gains last year:

02f99 US california housing CAR 2022 08 19 Santa Clara California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In Alameda County, in the East Bay, house prices fell for the second month in a row, -13% from the peak, but still +3% year-over-year:

75c0a US california housing CAR 2022 08 19 Alameda California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In Contra Costa County, in the East Bay, house prices fell for the third month in a row, -14% from the peak, -4% year-over-year:

75c0a US california housing CAR 2022 08 19 Contra Costa California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

Southern California trying to catch up with the Bay Area.

In Southern California overall, house prices fell for the second month in a row, -4% from the peak, but still +6% year-over-year.

75c0a US california housing CAR 2022 08 19 Southern California California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In San Diego County, the median house price fell for the third month in a row, -5% from the peak, which whittled the year-over-year gain from the 30%-range last year to +8% in July:

94a2d US california housing CAR 2022 08 19 San Diego California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In Los Angeles County, the median house price has gone wild since the peak in September last year, -4.5% from that peak.  Year-over-year, +4.5%.

But wait… special nugget: Seasonally, in LA County, the median price always rises from June to July, and this year’s drop in July from June was the first drop in many, many years. During the Housing Bust in 2008, the median price was essentially flat. And even in July 2009, as all heck had broken loose, the median price rose from June, which puts this year’s 1.6% drop in July from June into a very special light.

94a2d US california housing CAR 2022 08 19 Los Angeles  California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

In Orange County, the median house price fell for the third month in a row, -7% from the peak, which whittled the year-over-year gain from the 27%-range early this year to 13% in July:

94a2d US california housing CAR 2022 08 19 orange California Housing Market Pukes: As Sales Collapse (San Diego County  41%), Prices Begin to Swoon

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Article source: https://wolfstreet.com/2022/08/19/california-housing-market-pukes-as-sales-collapse-san-diego-county-42-prices-begin-to-swoon/

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