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The CA Association of Realtors has released the May 2024 Housing Market Statistics. Most of these sales went into contract in April with a 30 day escrow to result in a May closing.
In the Los Angeles County housing market statistics the median price fell 1.7% in May. Last year prices rose slightly .8%. Median price also fell in Ventura County 1.6% which was much lower than last year’s increase of 7.8%. Median price is still up 9% in Los Angeles County from same time last year while Ventura County is just about even according to the California Association of Realtors. Prices are giving up a little ground from their highest in our area but some other parts of the country are seeing very different results so I recommend to follow local news in addition to national news.
The total sales volume month to month rose almost 12% in Los Angeles County and a little lower 6.4% in Ventura County over the previous month and fell a little in both counties from same time last year. This is not a bad result considering last month’s sales volume was up sharply in Ventura County.
For April contracts = May closings the 30 year fixed interest rates started the month at 7.22% but ticked down a little during the month. Unfortunately there was still hope that the Fed would cut the rate but they did not which was disappointing. But were finishing the income and property tax season and should be recovering from that soon.
More local to the real estate market in Los Angeles, in the San Fernando Valley in April the inventory inched up a little higher to 2.6 months of inventory. A balanced market Sellers/Buyers is considered 6 months so we are still in a Seller’s market. Mortgage rates have held pretty steady but consumers are still lamenting the high prices. Properties that are priced right do sell with multiple offers but more likely to be 3-5 offers rather than the 20 to 30 offers during Covid.
While the market is getting a slow start to spring it does anecdotally feel like activity is starting to come out of hibernation. Families are starting to realize the school year is coming to an end and we survived another tax season. Scheduling income and property tax in the same month was not well thought out in my opinion. Sort of like the semi-annual property tax right before Christmas and Hanukkah.
Supply and demand clearly impacts what is happening in the real estate market but I think it is just as important to pay attention to macroeconomic conditions. I continue to watch – the commercial real estate market, California’s economy (especially the unemployment figures), and China’s economy. I am not a trained Economist but it feels like the powers that be are using metrics that have not been updated to reflect societal changes post-Covid.
Los Angeles County seasonally adjusted unemployment dropped very slightly in May to 5.3% but Ventura County’s unemployment dropped down to 4.2% in April according to the EDD. Both are still above the national average of 4%.
Another key item I continue to keep an eye on is credit card debt and delinquencies. The share of credit card debt that’s severely delinquent, defined as being more than 90 days overdue, rose to 10.7% during the first quarter of 2024, according to the Federal Reserve Bank of New York. A year ago, just 8.2% of credit card debt was severely delinquent.
With regards to how California’s economy is doing here is the full Executive Summary from the California Legislative Analyst Office included with the 2024 to 2025 State Budget. Note this key sentence: These deficits likely necessitate ongoing spending reductions, revenue increases, or both. Now we know why the current administration moved so strongly against the the Taxpayer Protection and Government Accountability Initiative, which would have expanded the requirements necessary for a statewide tax increase from a two-thirds vote of the Legislature to a two-thirds vote by lawmakers and approval by a majority of California voters. Hold on to your wallets.
Here is the Executive Summary
California Faces a $68 Billion Deficit. Largely as a result of a severe revenue decline in 2022‑23, the state faces a serious budget deficit. Specifically, under the state’s current law and policy, we estimate the Legislature will need to solve a budget problem of $68 billion in the upcoming budget process.
Unprecedented Prior‑Year Revenue Shortfall Creates Unique Challenges. Typically, the budget process does not involve large changes in revenue in the prior year (in this case, 2022‑23). This is because prior‑year taxes usually have been filed and associated revenues collected. Due to the state conforming to federal tax filing extensions, however, the Legislature is gaining a complete picture of 2022‑23 tax collections after the fiscal year has already ended. Specifically, we estimate that 2022‑23 revenue will be $26 billion below budget act estimates. This creates unique and difficult challenges—including limiting the Legislature’s options for addressing the budget problem.
Legislature Has Multiple Tools Available to Address Budget Problem. While addressing a deficit of this scope will be challenging, the Legislature has a number of options available to do so. In particular, the state has nearly $24 billion in reserves to address the budget problem. In addition, there are options to reduce spending on schools and community colleges that could address nearly $17 billion of the budget problem. Further adjustments to other areas of the budget, such as reductions to one‑time spending, could address at least an additional $10 billion or so. These options and some others, like cost shifts, would allow the Legislature to solve most of the deficit largely without impacting the state’s core ongoing service level.
Legislature Will Have Fewer Options to Address Multiyear Deficits in the Coming Years. Given the state faces a serious budget problem, using general purpose reserves this year is merited. That said, we suggest the Legislature exercise some caution when deploying tools like reserves and cost shifts. The state’s reserves are unlikely to be sufficient to cover the state’s multiyear deficits—which average $30 billion per year under our estimates. These deficits likely necessitate ongoing spending reductions, revenue increases, or both. As a result, preserving a substantial portion—potentially up to half—of reserves would provide a helpful cushion in light of the anticipated shortfalls that lie ahead.
Who to Call
General real estate agents are great for working on every day transactions but if you are a Senior who is downsizing, a family settling an Estate in Probate or Trust administration or a family in a Divorce you need a real estate professional trained for these cases.
For a free consultation on your home’s value, how to prepare your home to sell or the real estate market in general call me at (818)570-1144 or email [email protected] or visit https://janeybishop.com
SRES, CPE, CPRES, RCSD, CDRE
Senior Real Estate Specialist
Certified Divorce Real Estate Expert
Certified Probate Expert
Certified Probate Real Estate Expert
Real Estate Collaborative Specialist – Divorce
