Outstanding June Sales nudge California Closer to Normalcy

The drought and raging wildfires appear not to be dampening the enthusiasm of people who wish to live inrnCalifornia.  CoreLogic reports that thernstate had the highest number of home sales in nine years in June and that salesrnjumped more from May to June than in any month in nearly three years.</p

Andrew LePage, writing in the CoreLogicrnInsights blog says home sales, bothrnnew and existing, totaled 46,095 in June, a 10.8 percent increase from May andrnup 16.8 percent from June 2014.  The lastrntime June sales were higher was in June 2006 when 59,018 homes sold.  June 2015 bested sales in every month sincernSeptember 2006 when 46,464 transactions closed. </p

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In past years, CoreLogic’s records gornback to 1988, the May to June increase has averaged about 5 percent, roughlyrnhalf the month-over-month gain this year.  Sales in the Golden State have now increasedrnon an annual basis for four months after a period in which those sales declinedrnin 11 of 12 months and the June 16.8 percent gain was the highest for any monthrnsince October 2012 when sales rose 22.3 percent year over year. The previous highestrnyear-over-year gain in 2015 was 12.2 percent in March.</p

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LePage said the California employmentrnsituation is one reason behind the big jump in sales.  Non-farm jobs rose 3 percent over the 12rnmonths ended in June, resulting in nearly 462,000 new jobs. Low interest ratesrncoupled with consumer sentiment that those rates won’t last may also havernspurred sales.  There were also more businessrndays in June in which closings could take place and deeds be recorded than inrnMay. </p

LePage cites June’s sales as one indicationrnof returning normalcy in the state. rnWhile they remained nearly 10 percent below the long term average for Junern- 51,111 transactions – sales in June 2014 missed the average by 23 percent.  No month has surpassed its long term averagernin the state for over eight years. </p

He said the state’s housing market alsorncontinued to edge toward normalcy in other ways last month. Absentee buyers -rnmainly investors and second-home buyers – purchased 20.8 percent of the homesrnsold in June, the lowest share since June 2010 and well below the peak absenteernshare of 32.5 percent in February 2013 and coming close to the long-termrnmonthly average of about 18 percent.</p

Cash purchases were also the lowest,rnrepresenting 22.4 percent of all sales in June, since November 2008, but stillrnabove the long-term monthly average of about 17 percent. The cash share peakedrnat 37.3 percent in February 2013. Distressed sales, the combination of realrnestate-owned (REO) sales and short sales, accounted for 7.2 percent of June sales,rnwhich is the lowest since July 2007, when it was 6.7 percent. The distressedrnsales share peaked at 67.5 percent in January 2009.

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