Southern California house hunters start 2018 with fewest choices in 5 years

Southern California home sellers are starting 2018 like they acted for almost all of last year: In hiding!
Any house hunter seeking an existing home in the four-county Southern California region should take notice: There haven’t been this few options as a year began since 2013. Potential buyers must act quickly or face having the home they’re considering snapped up by others.
And it won’t be easy to decide on such a large purchase when the modest number of owners who are selling are largely in control of the dealmaking. It means frustration for many house seekers and as a result, the homebuying pace is relatively stagnated.
According to ReportsOnHousing statistics, Southern California listings last year ran on average 15 percent below 2016’s inventory. As a result, 23,149 residences were listed for sale as of Dec. 28 — a supply one-fifth smaller than what was available to buy as the previous four years started.
And on top of low inventory’s contribution to heightened competition, do not forget that Southern California bosses have added 830,000 jobs in five years — and that 12 percent increase had created many financially ready-to-buy households.
That strong regional economy also means few have to look for out-of-town work opportunities. That’s a key reason owners are reluctant to sell. Also, the area’s population is aging and older folks tend to move less.
Finances hem in owners, too. Housing’s expensive — CoreLogic’s regional median selling price is at an all-time high — so many owners don’t see the financial motivation to become sellers.
Mortgage rates have risen a bit, so a seller could face bigger house payments in buying another home. New federal tax laws may discourage other sellers, too.
And the inventory shortfall can be a self-reinforcing factor: If you sell your residence, can you even find another home nearby to buy?
Here’s one example of how hard it is to make a deal.
ReportsOnHousing’s “market time” metric — a benchmark of selling speed — was at 79 days from listing to escrow as of Dec. 28. That’s nearly a month quicker than the 106 average days it to took to sell in the previous four years.
These are key reasons why dealmaking is a little soft. At 2018’s start, 8,763 Southern California existing homes had signed sales contracts in escrow, up only 5 percent above 2014-17 average.
You won’t find many places in Southern California with ample homebuying options. Each of the four counties suffers from depressed inventory.
Orange County’s inventory as 2018 began was 22 percent below the 2014-2017 average start. Los Angeles supply was down by an equal amount. Riverside County had 20 percent fewer listings. In San Bernardino County, the drop was 17 percent.
But ReportsOnHousing’s market time does offer a hint of where it’s easiest to look: Riverside County, where a typical listing is taking 116 days to enter escrow. That a far longer selling period than San Bernardino’s County’s 81 days; Orange County’s 67; or L.A.’s 65.
Developers won’t be a major help. Yes, they’re briskly selling homes. But new construction tends to be pricier, and homebuilders account for a small slice of all local sales — roughly 1-in-9.
So 2018 begins with much of the regional housing market in a noteworthy wait-and-see pickle: Waiting for owners to decide if they want to sell as springtime’s prime homebuying season approaches … and seeing what house hunters think of what actually comes to market.
Source: Oc Register