California home sales in July rose above a year earlier for the first time since last summer as lower mortgage rates helped spur demand. Statewide and in Southern California the median price paid for a home hovered less than 2 percent above where it was a year earlier, but the San Francisco Bay Area’s median fell year over year for the third consecutive month. An estimated 42,432 new and existing houses and condos sold statewide in July 2019, up 5.1% from June 2019 and up 1.8% from July 2018, CoreLogic public records data show. Activity normally edges lower between June and July, and since 2000 the average change in sales between those two months is a decline of 5.3%. The year-over-year sales increase this July marked the first annual gain since July last year, and the number of homes sold this July was the highest for that month since 46,757 homes sold in July 2015. The modest strengthening of home sales this July reflects multiple factors, including lower mortgage rates, job and income growth and more inventory. While California’s median sale price was up 1.4% year over year this July, the state’s “typical mortgage payment” – the monthly principal and interest payment on the median priced home – fell 7.1 percent because of a roughly 0.7 percent decline in mortgage rates over that 12-month period.
Many of the buyers whose deals were recorded this July would have signed sales contracts in June or May. The downward movement of mortgage rates into late summer could lead to a continued strengthening in sales, especially if inventory continues to rise. One caveat to this July’s annual sales increase is there was one more business day for recording deals compared with July last year. If it weren’t for this, sales likely would have fallen 2% to 3%. However, that would still be an improvement compared with the average year-over-year change in home sales – a decline of about 9% – each month this year between January and June. Compared with a year earlier, July 2019 sales declined below $500,000 and above $1 million but increased about 7 percent between $500,000 and $1 million. Deals below $300,000 fell 7.3% year over year, while sales under $500,000 fell 0.8% and sales of $500,000 or more rose 4.4%. Sales of $1 million-plus fell 2% year over year and $2 million-plus deals fell 2.8%. Through the first seven months of this year sales of $1 million or more have fallen 8.7 percent compared with the same period last year, while $2 million-plus sales fell 8.8 percent. Stock market volatility has likely played a role in this year’s decline in high-end sales.
The median price paid for all new and existing houses and condos sold statewide in July 2019 was $502,000, down 1.2% from an all-time high of $508,000 in June 2019 and up 1.4 percent from $495,000 in July 2018. A dip in the median sale price between June and July is normal for the season and on average since 2000 the median has declined 0.4 percent between those two months. This July’s 1.4% year-over-year gain was down from an annual increase of 6.5% in July last year and an 8.1% gain in July 2017.
Other July 2019 highlights:
– Adjusted for inflation, California’s July 2019 median sale price remained 14.2% below its March 2007 peak.
– In the six-county Southern California region, 22,071 new and existing houses and condos sold in July 2019, up 3.7% year over year. July’s median sale price was $540,000, up 1.9% year over year. Three of the counties posted annual gains in their medians of between 2.9% and 5.0%, while Orange County logged an annual decline of 0.8% and San Diego and Ventura counties showed no change in their medians compared with a year earlier.
– Counties in the relatively affordable Central Valley and Inland Empire (Riverside-San Bernardino counties) recorded some of the state’s largest annual increases in home sales this July, including the following: Butte (+26%); Madera (+14.2%); Yolo (13.2%); Riverside (8.6%); Kern (+7.8%) and Sacramento (+5.7%).
UAW workers walk out on GM
By Ken Martin, Evie FordhamPublished September 16, 2019AutoFOXBusiness
Auto workers walk out on GM over contract dispute
United Auto Workers members went on a nationwide strike against General Motors on Sunday night after contract talks broke off Sunday. It is the first strike against GM in 12 years. More than 49,000 UAW members walked off General Motors factory floors or set up picket lines early Monday. Talks will resume Monday morning as UAW continues to demand a bigger share in the company’s profits, including through annual pay raises. Union officials say both sides are far apart in the talks, while GM says it has made significant offers. UAW represents workers at 33 manufacturing sites and 22 parts warehouses across the country. On Sunday, President Trump tweeted for the two sides to make a deal. Trump is not the only politician who has weighed in on the topic. Democratic presidential candidates including Massachusetts Sen. Elizabeth Warren, former Vice President Joe Biden, South Bend, Ind., Mayor Pete Buttigieg, Vermont Sen. Bernie Sanders and former Housing and Urban Development Secretary Julian Castro expressed support for the workers. “The CEO of GM made nearly $22 million dollars last year—281 times the median GM worker. I stand with the 46,000 UAW members who have moved to strike, fighting for affordable health care and fair wages. GM can afford to do right by the,” Castro wrote on Twitter on Sunday.
A person briefed on the bargaining told the Associated Press that GM has offered the UAW new products for two assembly plants that it had planned to close. GM says it presented what it believes was a “strong offer” including improved wages and benefits and investments in eight facilities in four states. The strike will affect GM plants in Michigan, Ohio, Tennessee, Kentucky, New York, Texas and elsewhere in the U.S. Cox Automotive calculated on Wednesday that GM has about a 77-day supply of cars, trucks and SUVs. “If a strike occurs, GM has enough inventory on the ground so as not to hinder sales in the short run. Strong sales in August helped trim overall industry inventories to the lowest level in three years, according to Cox Automotive data, but GM’s inventories remain healthy and even above industry average,” according to commentary from Cox. International Brotherhood of Teamsters General President Jim Hoffa said on Sunday that its members won’t be transporting GM vehicles during the UAW strike. The strike comes days after UAW official Vance Pearson was charged Thursday with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. Trump and GM chief executive Mary Barra met at the White House on Sept. 5 to talk about issues including the union contract dissussions. Barra described the meeting as “productive and valuable.”
Trump’s housing-finance plan aims to curb GSE lending in areas with rent control
When Treasury released its housing finance reform plan a week ago, there was one proposal buried in the middle that didn’t get much attention: curbing Fannie Mae and Freddie Mac multifamily lending in areas that adopt rent control. It was marked “administrative,” meaning Treasury believes it can be done without input from Congress. When the plan was released, New York had recently expanded its rent control law and Oregon had adopted statewide rent control. This week, lawmakers in California, the most populous U.S. state, joined Oregon in passing a statewide bill to control rents, and Gov. Gavin Newsom has already said he’s going to sign it. “This is the Trump administration against the blue states,” Ed Mills, a public policy analyst with Raymond James in Washington, said in an interview with HousingWire. “This matches their philosophy, but it has the added benefit of Trump, using administrative actions, being able to influence policies in states run with Democratic majorities.” But, perhaps that one suggestion, buried in the middle of a 53-page report, will never see the light of day? “This is absolutely going to happen,” Mills said. “It’s just a matter of the scale and timing. The lesson I’ve had through observing the Trump administration is: They tell you in advance what they are going to do and they more often than not follow through.” The plan cites rent control as interfering “with the functioning of local housing markets, tending to decrease the supply and quality of the available housing.”
According to the housing finance plan that Treasury Secretary Steven Mnuchin said had been approved by President Donald Trump, the Federal Housing Finance Agency, the independent regulator of Fannie Mae and Freddie Mac, should make multifamily lending tougher to secure in rent-controlled areas. “Treasury recommends: FHFA should revisit the GSEs’ underwriting criteria for acquisitions of multifamily loans secured by properties in jurisdictions that adopt rent-control laws or other undue impediments to housing development,” the plan stated. On Friday, FHFA Director Mark Calabria issued changes in multifamily lending that raised the volume caps for the government-sponsored enterprises, or GSEs, as Fannie Mae and Freddie Mac are known. It also ended a carve-out for so-called “green” loans, referring to financing for changes to make buildings more energy-efficient. It didn’t mention rent control. “Look at the action the FHFA took today, regarding some of the green-housing initiatives,” Mills said on Friday. “That’s a Democratic priority that got a lot of support, that this administration walked back.” Mills couldn’t predict when FHFA might act. FHFA and Treasury officials did not return emails seeking comment. “It’s going to be state-by-state and it’s going to be a showdown between state government and federal government,” Mills said. “For a lot of high-costs areas, the only supports that exist, the only Fannie/Freddie benefit they get, is through the multifamily space.”
Oil prices surge as attack on Saudi facility disrupts output
An attack on Saudi Arabia’s largest oil processing plant pushed crude prices sharply higher Monday. Traders are focusing on the longer-term impact as it depends on how long production is disrupted and the attack’s future implications. U.S. crude oil was at $59.80, up $4.95, or 9 percent per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, was at $66.31, up $6.09, or 10.1 percent, from its previous close. The attack on the Saudi Aramco facility halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports. It is also more than 5 percent of the world’s daily crude oil production. Most output goes to Asia. Yemen’s Iran-backed Houthi rebels claimed responsibility for the attack. Officials said they would use other facilities and existing stocks to supplant the plant’s production. President Trump tweeted that the U.S. is ready to respond to a shortage. The Wall Street Journal reported Sunday that Saudi officials said a third of crude output will be restored Monday, but bringing the entire plant back online may take weeks.