At the recent LeadingRE Annual Conference, Leslie Appleton Young, Chief Economist at the California Association of Realtors, shared the following insights. This is the conference that just keeps on giving!
- GDP increase in the past ten years has averaged about 3%. US unemployment is 4.1%, California unemployment is 4.3%.
- California was leading the nation in job growth from 2012 until last spring.
- We are pricing ourselves out of job growth because Millennials can’t afford to live in California. Theyare moving to Austin, Nashville, and Boulder. People making $75,000-$100,000 are leaving California because it’s too expensive.
- Consumer confidence is high, good economy predicted in 2018, and stronger growth.
- Cash deals in CA use to be 33% but are now only 20% of sales.
- Sellers are not moving as often due to capital gains, property tax, and being locked into lower interest rates.
- California currently has its lowest inventory since 2004. Supply has been declining for a while.
- Most robust demand is at entry level.
- Affordability peaked in the first quarter of 2012.
- Renter-occupied Single Family Residences have increased.
- LA County – Three months of inventory. Average DOM (days on market) is 30 days.
- Leading indicator for stock prices: inflation. It’s expected to rise in 2018.
- Tax Cuts & Jobs Act – took home bias out of the equation; makes housing more expensive.