California home sales and median price post higher in October
Source: C.A.R.
Bolstered by healthy sales activity in Southern California and the Central Valley, California existing
home sales and median price gained ground in October on a month-to-month and year-over-year basis,
the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted
annualized rate of 442,970 units in October, according to information collected by C.A.R. from more than
90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would
be the total number of homes sold during 2016 if sales maintained the October pace throughout the
year. It is adjusted to account for seasonal factors that typically influence home sales.
Making sense of the story

The October figure was up 4.1 percent from the revised 425,680 level in September and up 8
percent compared with home sales in October 2015 of a revised 410,310. Home sales remained
above the 400,000 pace for the seventh straight month, and were up year-over-year for the second
consecutive month. The year-over-year increase was the largest since January, and October’s
sales level was the highest since July 2013.

“With prices continuing to increase amid a low supply of homes for sale on the market, especially
in the San Francisco Bay Area and coastal regions, home buyers are migrating toward lowerpriced homes in more affordable inland areas,” said C.A.R. President Geoff McIntosh. “As a
result, home prices at the lower end of the market have risen significantly in the past year,
challenging an already depressed homeownership rate.”

The statewide median price remained above the $500,000 mark for the seventh straight month,
with little signs of slowing down. The median price of an existing, single-family detached
California home was up 1.2 percent in October to $513,520 from a revised $507,260 in
September. Since 2010, prices typically have declined from September to October. The monthly
price gain is an indication that demand remains unseasonably strong.

“While this month’s sales and price gains are encouraging, the market continues to experience a
supply issue that won’t abate any time soon,” said C.A.R. Vice President and Chief Economist
Leslie Appleton-Young. “A shortage of new listings remains a threat to home sales in the short
run, and with available inventory below normal levels, the dearth of listings suggests that the
market will remain tight over the near term.”
Full Story
http://www.car.org/newsstand/newsreleases/2016releases/oct2016sales
In other news…
Making California housing affordable again will require new laws…
Source: Orange County Register
California can increase the number of homes that people can afford by giving more money to cities that
build sufficient affordable housing, some said at a housing summit last week in Los Angeles by the
CALIFORNIA ASSOCIATION OF REALTORS®. Or cutting off funding to those that don’t.
Or by allowing developers to bypass the local process in cities and counties with insufficient affordable
housing. Allowing single-family homeowners to build and rent out granny flats. And by streamlining the
approval process for affordable housing projects.
Joel Singer, the association’s longtime chief executive, spelled out two stark facts threatening the Golden
State: California ranks 49th in the nation in homeownership rates. And 50th in affordability rates. “Where
are our children going to live?” Singer asked.
Full story
http://www.ocregister.com/articles/housing-735235-affordable-california.html
Californians fleeing high cost of housing
Source: Mercury News
For every home buyer coming into California, another three are selling their homes, packing up and
moving out, according to data analysis firm CoreLogic.
The trend of out-migration was also noted in a separate trio of reports released earlier this year by Beacon
Economics. Beacon noted that 625,000 more U.S. residents left California between 2007 and 2014 than
moved into the state. The vast majority ended up in Texas, Oregon, Nevada, Arizona and Washington.
The search for more affordable housing is sending low and middle-income workers out of the state, while
higher-wage workers continue to move in, which argues against the theory that high taxes are driving
people away. Home prices and rents have been rising steadily for more than four years.
Full story
http://www.mercurynews.com/2016/11/14/californians-fleeing-high-cost-of-housing/
Is home equity still a retirement failsafe?
Source: RISMedia
A recent study by the Urban Institute explored homeownership as a viable path to a secure retirement, but
many older homeowners missed the prime opportunity to leverage that equity before the recession. How
much usable equity can older homeowners now expect in retirement, given the rebound in home values?
Homeowners aged 65 or older, according to the study’s findings, could have used their home’s equity to
grow their retirement income by over 50 percent (up to $60,000) pre-recession, either by borrowing a
home equity line of credit, selling their home at a profit, or taking a cash-out refinance or second
mortgage. That percentage dropped to 40 percent (up to $49,000) by 2012, despite accumulating an
average 10 percent more equity then than in 1998. Home values, still, grew 3 percent by 2014.
Monetarily, the average older homeowner’s equity stake increased from $117,000 to $166,000 between
2000 and 2006, then decreased to $129,000 by 2012.
Full story
http://rismedia.com/2016/11/13/study-home-equity-still-retirement-failsafe/
How Trump will change the U.S. housing market
Source: Realtor.com
Could President-elect Trump make the housing market ‘great again’ for buyers? A Trump presidency
could be a boon for home buyers struggling to save up for a hefty down payment because he has promised
to cut taxes and shrink the number of tax brackets from seven to three. This could, in theory, leave buyers
with more money to spend on the homes of their dreams.
But real estate analysts were quick to point out that some of the reforms laid out in the Republican
platform could potentially force buyers to plunk down larger down payments or pay higher interest rates.
That could be problematic for those without a few extra million dollars in their bank accounts.
The Republicans will also stop the Federal Housing Administration (FHA) from providing taxpayerguaranteed mortgages to wealthy home buyers. The FHA typically insures loans for low-income, firsttime, and other buyers who don’t have enough for a 20 percent down payment. Repealing or limiting
Dodd-Frank Wall Street Reform and Consumer Protection Act is also a possibility. The act provides more
oversight of financial institutions in the wake of the housing bust that plunged the nation into a recession.
Full story
http://www.realtor.com/news/trends/donald-trump-mean-for-housing/
A California city faces its housing squeeze
Source: New York Times
Over the last few years, the price of buying a home or renting an apartment in California has become so
burdensome that it pervades almost every issue, from the state’s elevated poverty rate to the debate about
multimillion-dollar tear-downs to the lines of recreational vehicles parked on Silicon Valley side streets.
The town of Mountain View, Google’s home, wants to do something about that. Given new marching
orders from a reform-minded City Council that was swept into office here two years ago, Mountain View
is looking to increase its housing stock by as much as 50 percent – including as many as 10,000 units in
the area around Google’s main campus.
Mountain View’s political evolution, combined with some limited cases elsewhere, suggests that as rent
and home prices have reached the point where even highly paid tech workers are struggling – the median
home here costs $1.4 million, according to Zillow – the tide is slowly shifting away from resisting growth
at all costs and instead trying to channel it.
Full story
http://www.nytimes.com/2016/11/14/business/mountain-view-california-confronts-housingcrisis.html
What you should know

Total mortgage application volume fell 9.2 percent on a seasonally adjusted basis from the
previous week, according to the Mortgage Bankers Association. Applications, however, were 12
percent higher than one year ago.

The drop was expected, given how quickly mortgage interest rates rose. The average contract
interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less)
increased to 3.95 percent, from 3.77 percent, with points increasing to 0.39 from 0.38 (including
the origination fee) for 80 percent loan-to-value ratio loans.

Mortgage applications to purchase a home fell 6 percent for the week and are now at the lowest
level since January.

Purchase volume is just 3 percent higher than one year ago. This may have less to do with interest
rates and more to do with homebuyers pulling back before the election, uncertain of their
economic futures.