California April home sales report – The California Association of Realtors reported that existing home sales totaled 277,440 on a seasonally adjusted annualized bases. That represented a 30.1% drop from the number of homes sold last April. The statewide median price was $606,410, up just 0.6% from last April’s median price. Fortunately, Los Angeles, Ventura, and Orange County posted much better results with prices up 3.9% in LA County, up 4.4% in Orange County, and up 3.8% in Ventura County. The number of sales was also down 30% in LA County and Ventura County, and down 37% in Orange County. This was expected. These numbers represent closings. Escrow periods are generally 30 to 60 days, so these homes were placed in escrow in February and March. The number of sales in May will be substantially lower, as it was not legal to show homes from March 20 to the middle of April in the City of Los Angeles, and Ventura County.
People were also afraid to look in other areas where it was permissible. For some reason now buyers have returned and it’s legal to show homes so long as protective guidelines are followed, which everyone seems willing to comply with. I certainly feel 100% more comfortable looking at a home than I do going to a market! Fortunately, the association also tracks pending sales, which are new contracts signed. Those have increased every week for the last 5 weeks, so we will begin to see a rebound in closed sales in June. It will probably be many months before we get back to the number of sales we saw last year. Prices are another story. From what I’m seeing I’ll be surprised if the median price is not up at least 6% year over year when June’s sales numbers are reported in July. The amazing part of the report is that out of the reduced number of homes that sold 100% were reported at full price or more. I really find that hard to believe, but I’ve never seen CAR make a mistake with their numbers. Keep in mind that many people took their homes off the market and there were very few homes to look at in March.
U.S. April home sales report – The National Association of Realtors reported April home sales figures on Friday. The National figures were much stronger than California’s numbers. The number of sales dropped 17.2% from one year ago, about 1/2 of the drop California saw. The median price paid for a home in the U.S. jumped 7.4% from the median price last April.
Mortgage rates are at record lows – The Freddie Mac Primary Mortgage Survey released on May 21, 2020, reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.24%, down slightly from 3.28% last week. The 15-year fixed was 2.70%, almost unchanged from 2.72% last week. The 5-year ARM was 3.17%, unchanged from 3.18% last week.
Stock market indexes gained over 3% this week – Stocks had a nice rally this week as investors were encouraged because the majority of the country began allowing businesses to re-open. There is also a new round of stimulus that should be voted on and approved the first week of June. That certainly helped fuel this weeks rally. The Dow Jones Industrial Average closed the week at 24,465.15, up 3.3% from 23,685.52 last week. It’s down 14.3% year to date. The S&P 500 closed the week at 2,966.45, up 3.2% from 2,863.70 last week. It’s down 8.5% year to date. The NASDAQ closed the week at 9,324.59, up 3.4% from 9.014,56 last week. It’s up 3.9% year to date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.66% almost unchanged from 0.64% last week. The 30-year treasury bond yield ended the week at 1.37%, up slightly from 1.32% last week.
Unemployment claims jumped for the ninth straight week – Another 2.4 million American workers filed first-time unemployment claims last week. That brings a total of over 38.6 million workers laid off in the last nine weeks. Although 2.4 million lay offs represented the fewest number of layoffs in the last nine weeks, the highest week in history before COVID was 600,000 in the beginning of the great recession. At least we are trending down. It will be interesting to see if we begin to trend back to gaining jobs as businesses begin re opening. With consumer spending accounting for two thirds of the economy, that’s is what investors are expecting.
Have a great holiday weekend!
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