December 2018 Housing Report: Home Sales Slows Down.

The new year is upon us and several year-end housing reports show month of Dec. 2018 was slowest in sometime. According to CAR (California Association of Realtors), “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.” Existing single-family home sales in December was down 2.4% compared to November and down 11.6% compared from December 2017. The statewide median home price was $557,600, down 0.5% from November and up 1.5% from December of 2017. In addition, statewide active listings rose for the ninth straight month, increasing 30.6% from the previous year.

While some may view this current slowing housing market to continue heading into 2019, I believe the housing market has a good opportunity to stabilize in the next coming months with more home sale transactions in the Bay Area. First, it is reasonable to expect the housing market at end of 2018 to be slower than previous years due to the fact there was a correction in the stock market from beginning of October to end of December. Most buyers held back their purchasing plans to see how the stock market will work itself out before proceeding with any home buying. While the stock market is still in flux due to the global trade market, corporate earnings, and news from trade negotiations with China, the stock market has regained approx. 40% - 50% of its losses from its lowest point in mid-December within one-month time. Depending how the stock market performs in the coming months, the current upward trend should have buyers regain confidence in the stock market and restart their home buying plans. Second, due to the stock market steep decline last quarter, the US Federal Reserve has hinted it may slow down its plan to raise interest rates. This should stabilize the bond market and in turn be beneficial to mortgage rates by keeping them steady and not rising at a fast pace. Third, inventory has been increasing and this is welcome news to any home buyers. With more homes on the market, buyers are more enticed to start home shopping.

Only time will tell how the 2019 housing market will turn out. As a potential buyer or seller, it is best to evaluate your own situation and needs before deciding to step in the housing market. With the current housing market trend, it is highly recommended that you review your local housing market data as part of your decision-making process. Knowing how the market is doing and how its trending will set a realistic expectation with your future home buying/selling process.

To obtain your local housing market data, feel free to contact me and I would be happy to share any information with you. My goal is to help clients make the right decision in this ever-changing market.

Nelson