January 17, 2018

California home sales close year on downward trend as home prices post mild gains, C.A.R. reports

- Existing, single-family home sales totaled 372,260 in December on a seasonally adjusted annualized rate, down 2.4 percent from November and down 11.6 percent from December 2017.

- December's statewide median home price was $557,600, down 0.5 percent from November and up 1.5 percent from December 2017.

- Statewide active listings rose for the ninth straight month, increasing 30.6 percent from the previous year.

- The statewide Unsold Inventory Index was 3.5 months in December, down from 3.7 months in November.

- For the year as a whole, sales were down 5.2 percent from 2017.

LOS ANGELES (Jan. 17) – California home sales declined for the eighth straight month in December, and a stagnating market for much of the year pushed sales lower in 2018 for the first time in four years, 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 372,260 units in December, 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 2018 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

December's sales figure was down 2.4 percent from the revised 381,400 level in November and down 11.6 percent from home sales in December 2017 of 420,960. December marked the fifth month in a row that sales were below 400,000 and the lowest level of sales sold since January 2015.

"The housing market continued to shift in December and drift downward as sales have fallen double digits for the past three out of four months," said C.A.R. President Jared Martin. "This trend is expected to continue, as buyers remain cautious about the murky housing market outlook due primarily to the volatility in the financial markets and uncertainty in the economic and political arenas.

"Additionally, housing markets in and around the wildfire areas have been exhibiting unusual patterns that could remain unsettled for the next few months. The impact, however, is confined mostly within the region and should not have a noticeable effect in the housing market at the state level."

The statewide median home price declined to $557,600 in December. The December statewide median price was up 0.5 percent from $554,760 in November and up 1.5 percent from a revised $549,550 in December 2017. The statewide median home price for the year as a whole was $570,010, up 6.0 percent from $537,860 in 2017.

"California's housing market in 2018 was hindered by endlessly rising home prices and interest rate hikes, which combined to erode housing affordability and hamper home sales," said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. "As a result, while the statewide median home price surpassed its previous peak and set a new record in 2018, annual home sales fell for the first time in four years to a preliminary 402,750 closed escrows in California, down from 2017's pace of 424,890.

"In the coming months, we expect a brief hiccup in sales as the government shutdown temporarily delays closings due to interruptions in IRS income verification or the processing of HUD, VA and USDA loans," said Appleton-Young.

Other key points from C.A.R.'s December 2018 resale housing report include:

• On a regionwide, non-seasonally adjusted basis, sales dropped double-digits on a year-over-year basis in the San Francisco Bay Area, the Central Coast, Central Valley and Southern California regions, with the Central Coast dropping the most at 24.9 percent.
• Thirty-nine of the 51 counties reported by C.A.R. posted a sales decline in December with an average year-over-year sales decline of 20 percent. Thirty-four counties recorded double-digit sales drops on an annual basis, and 10 counties experienced an increase in sales from a year ago.
• Sales for the San Francisco Bay Area as a whole fell 17.5 percent from a year ago. Eight of nine Bay Area counties recorded annual sales declines of more than 10 percent. Only San Francisco County posted a year-over-year increase, gaining 11.3 percent from December 2017.
• The Los Angeles Metro region posted a year-over-year sales drop of 17.8 percent, as home sales fell 16.3 percent in Los Angeles County and 18.3 percent in Orange County.
• Home sales in the Inland Empire declined 19.8 percent from a year ago as Riverside and San Bernardino counties posted annual sales declines of 17.7 percent and 23.1 percent, respectively.
• The median home price continued to increase in all regions, except in the San Francisco Bay Area. On a year-over-year basis, the Bay Area median price dipped 3.6 percent from December 2017. Home prices in Marin, San Francisco, San Mateo and Santa Clara counties continued to remain above $1 million, but both San Mateo County and Santa Clara counties recorded a year-over-year price decline.
• Statewide active listings rose for the ninth consecutive month after nearly three straight years of declines, increasing 30.6 percent from the previous year. All major regions recorded an increase in active listings, with the Bay Area posting the highest increase at 65 percent, followed by Southern California (34 percent), Central Valley (24 percent) and the Central Coast (12 percent).
• The Unsold Inventory Index, which is a ratio of inventory over sales, increased year-to-year from 2.5 months in December 2017 to 3.5 months in December 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
• The median number of days it took to sell a California single-family home rose from 25 days in December 2017 to 32 days in December 2018.
• C.A.R.'s statewide sales price-to-list-price ratio* decreased from 98.7 percent in December 2017 to 97.4 percent in December 2018.
• The average statewide price per square foot** for an existing, single-family home statewide edged up from $268 in December 2018 to $266 in December 2017.
• The 30-year, fixed-mortgage interest rate averaged 4.64 percent in December, up from 3.95 percent in December 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also increased in December to an average of 4.02 percent from 3.39 from December 2017.

Graphics (click links to open):

• Calif. historical existing home sales.
• Calif. historical median home price.
• Year-over-year sales by price segment.
• Unsold inventory index of single-family homes.

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 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

# # #

December 2018 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

r = revised
NA = not available

December 2018 County Unsold Inventory and Days on Market

(Regional and condo sales data not seasonally adjusted)

r = revised

NA = not available

December 3, 2018

The dream of homeownership is still alive for California renters, C.A.R. survey finds

LOS ANGELES (Dec. 3) – Despite affordability challenges, California renters continue to hold homeownership in high regard and aspire to purchase a home eventually, according to a consumer survey released by the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) today.

C.A.R.'s 2018 State of the California Consumer Survey, which examines the attitudes and behaviors of real estate consumers, found half of California renters rated homeownership as very important or extremely important, and that four out of five renters want to own a home someday.

Renters see the advantages of homeownership as more than just a roof over their heads. Twenty-one percent of renters said homeownership would provide them with a good long-term investment, while 19 percent said it would give them the freedom to do what they wanted with their home. Twelve percent of renters said a benefit of homeownership would be having the stability to plant roots.

"It's encouraging that the majority of renters still believe buying a home is more than just a shelter over their heads," said C.A.R. President Jared Martin. "While they may not be there yet, many renters are motivated to become homeowners as they recognize the many benefits."

Report highlights:

Nearly half (45 percent) of renters said they would purchase a home if they got a new job, a raise, or a promotion, while another 40 percent said they would be motivated to buy a home if they got married or were starting a family.

Renters who want to become homeowners someday are generally younger and more diverse. They have been renting a median of eight years and are at a median age of 35, with over half being millennials. Nearly three-fourths are non-white, with almost half being Hispanic. Renters who plan to buy have a median income of $40,000 and currently spend a median of 45 percent of their income on housing costs.

While many renters want to own a home, they either feel they are not in a financial position to become a homeowner or don't have the financial knowledge. Only four in 10 renters are familiar with the credit and loan criteria needed to purchase a home. Further hindering renters from becoming homeowners, many renters also don't know how much down payment is required, with 14 percent under the impression that more than 50 percent down payment is needed for a home purchase. Nearly 40 percent of California renters believe that more than 20 percent is required to become a homeowner. This misconception results in many renters delaying their home purchase or possibly even giving up on the dream of homeownership.

California renters pay a median monthly rent of $1,300, but the cost of renting varies across the state. Renters who live in the Bay Area pay the highest rent at a median of $1,800, while those in Southern California pay a median of $1,390. In general, renters spend 45 percent of their income on housing, with nearly seven in 10 spending more than the recommended 30 percent. The rent burden is especially heavy for the younger generations, with millennials spending half their income on rent.

California renters typically have lived in their current home a median of three years but have been renting for a total of nine years. While the majority are unsure about how much longer they plan to live in their current residence, one-fourth of renters plan to move next year. Nearly two-thirds of renters plan to rent after moving from their current residence, with older generations more likely to continue to rent than younger ones.

In a sign of optimism, three-fourths of those who plan to rent again said they want to own a home eventually.

The 2018 State of the California Consumer Survey was conducted online between May 9 and July 9, 2018, aiming to understand the process of home buying and selling, as well as the motivation behind renting and owning from the perspective of the California consumer. Surveys were sent to 470,803 consumers ages 18 and older in the state of California, resulting in 6,144 participants, a 1.3 percent response rate. The margin of error was ±1.2 percent at a 95 percent confidence interval. For the renters section, 1,856 respondents were renting a home in California at the time of survey participation.

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 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

HOW TO GROW YOUR OWN AVOCADO TREE

Everything you need to know about how to grow an avocado tree. Really!

Everything you need to know about how to grow an avocado tree. Really! Want your own avocado tree or houseplant? There are a few ways to do it. This comprehensive guide tells you all you need to know, whether you're starting from a seed or planting a young tree.

• Planting
• Soil
• Watering
• Mulching/fertilizing
• Other growing tips

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Planting: Houseplant*

You can start with an avocado seed. Wash it. Use three toothpicks to suspend it broad end down over a water-filled glass to cover about an inch of the seed. Put the glass in a warm place out of direct sunlight and replenish water as needed. You should see the roots and stem start to sprout in about two to six weeks. (If you've followed this process so far and have not seen roots or a stem sprout in more than six to eight weeks, try another seed.) When the stem is 6 to 7 inches long, cut it back to about 3 inches. When the roots are thick and the stem has leaves again, plant it in a rich humus soil in a 10½-inch-diameter pot, leaving the seed half exposed. Water it frequently, with an occasional deep soak. The soil should be moist but not saturated. And don't forget: the more sunlight, the better. If the plant turns yellow, you may be over-watering; let it dry out for a few days. If the leaves turn brown and fry at the tips, too much salt has accumulated in the soil. Let water run freely into the pot, and drain it for several minutes. When the stem is 12 inches high, cut it back to 6 inches to encourage the growth of new shoots.

*Please note that the odds that your tree will bear fruit are very small.

Planting: Young tree

Remember that avocado trees do best at moderately warm temperatures (60 F to 85 F) with moderate humidity. They can tolerate temperatures, once established, of around 28 F to 32 F with minimal damage. Avoid freezing temperatures. Plant your tree in March through June. If you plant during the summer, there is always the risk of sun damage, because avocado trees don't absorb water very well when they're young. Plant it in a non-lawn area and away from sidewalks and, if you can, plant it in a spot protected from wind and frost. Remember, full sun is best. Dig a hole as deep as the current root ball and just as wide as the width plus a little extra so you can get your hands into the hole to plant it. The avocado is a shallow-rooted tree with most of its feeder roots in the top 6 inches of soil, so give it good aeration. Its root system is very sensitive, and great care should be taken not to disturb it when transplanting. If the tree is root-bound, however, loosen up the soil around the edges and clip the roots that are going in circles.

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Soil

Avocado trees like the soil's pH around 6 to 6.5. If you have a heavy clay soil, elevate the tree in a mound for better drainage. Make the mound 1 to 2 feet high and 3 to 5 feet around. Don't put gravel or anything else like planting media in the hole. The sooner the roots get into the bulk soil, the better the tree will do.

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Watering

Trees typically need to be watered two to three times a week. As the roots reach out into the bulk soil, more water can be applied and the frequency of watering can diminish to about once a week after a year. When watering the tree, soak the soil well, and then allow it to dry out somewhat before watering again. As with most plants, you don't want the tree to get too dry. The rule of thumb for mature trees is about 20 gallons of water a day during the irrigation season. Seedlings will require quite a bit less water, of course. Check the soil before watering each time to make sure it has dried somewhat. If the soil from around the roots can hold the impression of a hand when squeezed, it has enough water.

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Mulching and Fertilizing

Mulch with coarse yard mulch. Redwood bark or cocoa bean husks and shredded tree bark will work. Choose something that is woody and about 2 inches in diameter. Coarse yard mulch is available at some garden-supply centers and through tree-trimming operations. Tree-trimming operations sometimes have material that has been pruned from the tops of trees and doesn't contain any diseased roots. Use online search engines to find a local tree service. Put 20 pounds of gypsum spread around the tree base, and mulch the area with 6 inches of mulch, keeping the material about 6 to 8 inches away from the tree trunk. Fertilize your young avocado trees with ½ to 1 pound of actual nitrogen per tree per year. You can spread it out over several applications as long as it totals ½ to 1 pound of nitrogen. The other important nutrient for avocado trees is zinc. Ordinary home fertilizer for houseplants will normally work.

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Other growing tips

Be patient about seeing fruit. If you have purchased and planted a tree, you can probably expect to see your first fruit three to four years after planting. If you are growing from a seed, it can take anywhere from five to 13 years before the tree is mature enough to set fruit. When the tree does flower, expect a lot of flowers to fall without setting fruit. This is natural.

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FAQs and Troubleshooting

Should I plant a "B" type avocado with an "A" type avocado to help with good pollination?

How does temperature influence pollination and fruit set?

What can I do about my avocado tree dropping fruit?

How can I tell when my avocados are ripe and ready to pick?

So, when should I pick my avocados?

How many fruit will a mature tree produce in one year?

How many years will a normal avocado tree produce fruit?

When is the best time to prune avocado trees?

How large will my avocado tree get?

What's the creamy-white foamy looking stuff that grows out of the bark where there are cuts, or small branches have died and dropped off?

What areas of California are most hospitable to avocados?

More Resources

Not finding what you are looking for? Contact a master gardener* or see the below resources. All links open a new window:

1. Tips for the Backyard Avocado Grower (PDF) 
   This sheet, developed by the California Avocado Commission, was designed to provide Do-It-Yourself tips on growing an avocado tree
2. Ventura County Avocado Handbook* 
   This helpful handbook, hosted by the University of California Cooperative Extension, provides text book-like information on growing an avocado tree including grafting, planting, flowering and more
3. Growing Avocados (YouTube)*
   YouTube offers a helpful selection of avocado growing tips and videos from avocado enthusiasts all over the world
4. Avocado Source*
   The free, virtual library of avocado knowledge. Search for documents, research and more
5. Avocado Variety Information*
   Almost 1,000 varieties of avocados are identified on this page. Also available through this site is general avocado information, resources on flowering, irrigation, phenology and rootstocks

For cultural advice on your avocado tree or plant, please contact a master gardener* or nursery nearest you.

For assistance over the phone from a Master Gardner, try one of the following hotlines:

The California Avocado Commission does not sell, produce or have avocados, seeds or trees available for purchase. For information on where avocado trees are sold, please contact a nursery nearest you.

* Please note: The California Avocado Commission provides this information as a convenience to you; it should not be considered an endorsement by the Commission of a third-party website or the company who owns it. The Commission is not responsible for the quality, safety, completeness, or accuracy or nature of the content of the linked websites.

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