The once red-hot California housing sales market is officially now “weak” state analysts say. In a brief report issued by the state Legislative Analyst’s Office weighed in on the latest California home sales that trends are notably lower than historic norms. Home sales were on a clear downward trend during the second half of 2018 and the beginning of 2019.
The anticipation of a recession in itself could make the housing shortage even worse. Worried would-be sellers may decide to postpone listing until they can get top dollar for their properties.
Yet although a lack of homes for sale typically drives up prices, that effect could be mitigated if there are fewer folks who can afford to buy. In a recession, it could become harder to find a good-paying job or steady freelance work. Even those who remain gainfully employed may worry about their job stability.
Home prices may have just peaked. It could be a sign that a recession is looming on the horizon. In April, median U.S. home values fell 0.1% to $226,800 from $227,000 in March, according to Zillow the first month-to-month decline in seven years. That’s bad news for homeowners thinking of selling. Researchers at the Federal Reserve pointed out that a housing downturn has proceeded every U.S. recession since the 1950s.
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Key Points: A sudden pullback in spending among the wealthy could cascade down to the rest of the economy and create a further drag on growth. High-end real estate is having its worst year since the financial crisis. Luxury retailers are struggling while discounters like Walmart and Target thrive. At this month’s massive Pebble Beach car auctions, the most expensive cars faltered on the block. In the first half of 2019, art auction sales were down for the first time in years.
