What Recovery? CA Sales Tax Revenues Down Three Months—Housing Sales Tank

In April, California sales tax collections were down 2.1%, in May they were down 3.2% and in June they were down over 11%. That shows the lack of confidence in the economy—saving, paying off debt instead of spending. California real unemployment (U-6 of the Bureau of Labor Statistics) in June was 16.7%. California ended the last fiscal year with a $1.9 billion “surplus” (you get that by forgetting the $340 billion debt and hundreds of billions in unfunded pension plan liabilities). California is in a Depression and our confused Guv Brown cannot even understand the finances.

Now the housing market is tanking as well. Another sign the California economy is going south (while those in the south are invading us in the north).

“In June, non-distressed property sales increased 2.8 percent while sales of distressed properties fell 9.1 percent.

“June marks the sixth consecutive month that sales have been lower on a year-over-year basis,” says Madeline Schnapp, director of economic research for PropertyRadar. “The lack of distressed property inventory and rapid increase in median prices has definitely taken a toll on demand.”

california-drought-Cagle-Feb.-21-2014-300x218

 

 

California home sales tanking

Central Valley Business Times, 7/16/14

•  Rapid price increases fading into memory

•  “Sixth consecutive month that sales have been lower on a year-over-year basis”
California single-family home and condominium sales gained 0.6 percent in June but were down 12.6 percent from a year earlier, according to a report Tuesday evening from real estate information company PropertyRadar Inc. of Truckee.

Year-to-date sales for the first six months of the year are the lowest since 2008, it says.

In June, non-distressed property sales increased 2.8 percent while sales of distressed properties fell 9.1 percent.

“June marks the sixth consecutive month that sales have been lower on a year-over-year basis,” says Madeline Schnapp, director of economic research for PropertyRadar. “The lack of distressed property inventory and rapid increase in median prices has definitely taken a toll on demand.”

In June, the median price of a California home reached its highest level since December 2007, up $5,000, or 1.3 percent, to $390,000 from $385,000 in May. On a year-ago basis, median home prices gained 10.0 percent.

Driving the month-over-month price increase in June was the 2.8 percent increase in the sales volume of higher priced non-distressed properties, which accounted for nearly 83 percent of total sales, says PropertyRadar.

The median price of non-distressed homes was up only 0.8 percent over last year, indicating the 10.0 percent overall gain was primarily due to a shift from distressed to non-distressed sales, it says. The deceleration in price increases is even more apparent at the county level. In March, double-digit price increases occurred in 16 of the 26 largest California counties but by June that number had fallen to eight.

“The nearly uninterrupted double-digit monthly increases in median home prices from August 2012 through March 2014 has slowed considerably,” says Ms. Schnapp. “That’s good news for buyers who were finding themselves rapidly priced out of the market.”

Other highlights of the report include:

• Cash sales remained elevated in June, accounting for 22.2 percent of total sales. Despite the historically high levels of cash sales, cash sales have been steadily declining, falling 31.6 percent, since reaching an interim peak in May 2013.

• Flip sales fell 6.6 percent for the month and were down 30.0 percent for the year and are down 40.4 percent from the October 2012 peak.

• Negative equity remains elevated in California and continues to impart negative headwinds to the real estate market. In June, nearly 1.1 million California homeowners, or 12.9 percent remain underwater.

• Foreclosure starts, or Notices of Default (NODs), fell 2.0 percent between May and June, extending a longer-term downward trend. Foreclosure sales fell 5.2 percent for the month and are down 12.6 percent for the year. The June decline decelerated compared to May.

“Affordability and tight credit have slowed or stopped price increases despite lack of inventory,” says Ms. Schnapp. “Going forward, we expect low sales volumes and flat prices until increased supply forces prices lower or looser credit makes current prices more affordable.”

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. But…but….it’s another Summer of Recovery!

    • LOL. That was a funny line.

      Add in a projected tightening by the FED and the subsequent rising interest rates, CA real estate will crashing once again except for along the immediate coastline where it generally goes as soft landings.

  2. @Joshacham says

    Gee I wonder why. Moonbeam was raking in the dough with his tax increases! Oh… yeah, you increase taxes on some things, that leaves less money for people to spend for other things. How come the lunatic Left doesn’t understand that?

  3. It may be worse than it first appears. Considering the inflation in food prices, revene should be up from restaurants.

  4. SHHH. Don’t tell ‘Moon Beam’.
    He was counting on that money for his ‘Rosy Economic Projections,
    as well as his ‘Legacy’ Choo Choo.

Speak Your Mind

*