Summary
- Southern California has experienced one of the largest COVID-19 real estate market slow-downs in the US.
- Sales of existing, single-family homes dropped 45.6% YoY in May
- Median prices were slightly higher in May compared to the same period last year
- The drop in sales coupled with increasing supply has resulted in increased inventory
Sales of detached homes in California declined 41.4% year-over-year in May according to the California Association of Realtors (CAR) most recent monthly report as a result of the continued economic impact of COVID-19. The median price of a single-family home dropped 3.7% year-over-year to $588,070.
The median price of a condo in California is $464,900, a drop of 1% YoY
Figure 2. shows sales and active listing percentage change in different areas of California May 2020 vs 2019. The graph is taken from www.car.org
Sales of single-family homes dropped more than the supply (i.e active listings) in the Bay Area, Southern California, Central Valley and the Central Coast, which has resulted in an increase in inventory of 34.4% YoY.
Figure 3. shows median prices of single-family homes in Southern California counties for May 2019 and May 2020. Sales of single-family homes in Southern California declined 45.6% YoY whereas the median prices rose by 2.7%.
Figure 3. The median sold price of single-family homes
An increase in the median price of single-family homes occurred in the majority of Southern California counties except Orange County. Here’s how home sales and prices broke down by county in May 2020 as compared to May 2019:
- In Los Angeles County, sales fell 47.5% from a year earlier, while the median sales price rose 1.4%.
- In Orange County, sales fell 53.3%, while the median price dropped by 1.2%.
- In Riverside County, sales fell 43.0%, while the median price increased by 3.4%.
- In San Bernardino County, sales fell 37.6%, while the median price increased by 1.6%.
- In San Diego County, sales fell 42.3%, while the median price increased by 0.8%.
- In Ventura County, sales fell 52.0%, while the median price increased by 3.3%.
Figure 4. shows the median prices of condos in Southern California counties for May 2019 and May 2020. The median price of Southern California condos has increased over the past year.
Figure 4. Median sold prices of condos
The median price of Southern California condos rose in every county save for San Bernardino where prices declined. Here’s how condos sales and prices broke down by county in May 2020 as compared to May 2019:
- In Los Angeles County, sales fell 53.9% from a year earlier, while the median sales price rose 4.7%.
- In Orange County, sales fell 54.4%, while the median price increased by 3.0%.
- In Riverside County, sales fell 60.8%, while the median price increased by 6.5%.
- In San Bernardino County, sales fell 35.8%, while the median price decreased by 4.4%.
- In San Diego County, sales fell 46.5%, while the median price increased by 1.2%.
- In Ventura County, sales fell 60.4%, while the median price decreased by 4.7%.
The economic impacts of COVID-19 appear to be impacting the California real estate market in two distinct ways. With consumer confidence strained by COVID-19, sales of homes have been dramatically impacted. After all, it’s hard to justify buying a home when your employment situation is uncertain. Additionally, there is an excess of supply. Although, that hasn’t pushed prices down generally.
As jurisdictions across the country begin to ease lockdown and stay at home measures, there should be a gradual return to normal buying habits. How long it will take to get there is still unclear.