SoCal Home Sales and Median Prices in Novmeber

Southern California home sales increased slightly over the year in November, rising by 2.4% to 16,122 units (new and resale houses and condominiums). Although sales have now risen on a year-over-year basis for ten months in a row, the November advance was 23.8% below the November average going back to 1988 when this data series began. This was one of the slowest growth rates posted for the month of November on record. Compared with October, sales plunged by 19.1%, about twice the average decline in sales that typically occurs between October and November. The slower pace of sales reflects the twin constraints of declining affordability and tight credit. The continuing lack of inventory is also a factor, affecting even wealthier buyers with top notch credit.

The median price across Southern California increased by 6.8% over the year in November to $438,000 and was up by 0.7% over the month. The median price has been climbing steadily for 44 consecutive months on a year-over-year basis and is within 13.3% of the peak price reached in mid-2007. The share of sales of homes priced above $500,000 was 40.1% in November, up from 36.0% a year ago. The number of homes sold for $500,000 or more was up by 14.4%, while the number of homes sold below that price point declined by 4.0%. 

Source:  http://www.corelogic.com/solutions/configurable-real-estate-data-reports.aspx/

Happy New Year to 2.5 Million New Americans!

With the ringing in of the new year, the U.S. Census Bureau estimates the United States population reached 322,762,018 on January 1, 2016. This represents an increase of 2,472,745 or 0.77% from New Year’s Day 2015. Since Census Day (April 1, 2010), the U.S. population has grown by over 14 million people, a gain of 4.5%.

In 2016, the United States is expected to experience one birth every eight seconds and one death every ten seconds. Meanwhile, net international migration is expected to add one person to the U.S. population every 29 seconds. The projected combination of births, deaths and net international migration will increase the U.S. population by one person every 17 seconds.

The projected world population on January 1 was 7,295,889,256, an increase of 77,918,825, or 1.1% percent, from New Year’s Day 2015. During January 2016, 4.3 births and 1.8 deaths are expected worldwide every second.

The Census Bureau’s U.S. and World Population Clock simulates real-time growth of the U.S. and world populations at <http://www.census.gov/popclock>.

U.S. Light Vehicle Sales Set New Record

The U.S. economy as a whole may have had a so-so year in 2015, but the automotive industry had reason to celebrate, setting a new sales record with 17.47 million vehicles sold (the previous record was 17.35 million set in 2000) and posting six straight years of year-over-year sales gains.

In December, U.S. light vehicle sales were up by 2.5% to 17.7 million units (seasonally adjusted annualized rate). During the previous three months, the pace of sales exceeded 18 million units (also a record).  For all of 2015, sales were up by 5.4% compared with 2014.

Throughout 2015, U.S. auto sales were dominated by demand for light trucks, SUVs and crossover utility vehicles (a vehicle built on a car platform that combines design elements and features of an SUV). Sales increased by 12.5% over the year in December to 10.1 million units and accounted for 58.5% of the sales mix, the highest since peaking at 61% in June of 2005.

• Sales of domestic trucks increased by 5.5% over the year to 8.1 million units
• Foreign light truck sales, which account for 20% of the U.S. light truck market, surged by 53.9% to 2.0 million units
• Compared with November, sales of pick-ups, SUVs and CUVs fell by 4.6%

Total passenger car sales, including foreign and domestic models, declined by 9.0% over the year to 7.1 million units. Sales of passenger cars were down in nine of the past 12 months on a year-over-year basis.

• Sales of domestic autos declined by 6.5% over the year to 5.4 million units
• Sales of foreign passenger cars plunged by 16.0% to 1.8 million units
• Compared with November, total passenger car sales were down by 5.2%

Sales of medium-heavy trucks, which are typically used by businesses for hauling freight and making deliveries, rose by 4.8% over the year in December to 440,000 vehicles. 

In spite of a year rocked by major recalls (Volkswagen, Takata air bags, GM ignition switches), the U.S. auto industry welcomed the new year with plenty of momentum at its back. Last year’s record sales were supported by a solid economy, historic low interest rates and more confident consumers.  Looking ahead, 2016 will likely be another good, if not quite as robust, year for the industry. Interest rates will increase, but job and income growth along with more optimistic consumers should deliver sales of 17.5 to 18.0 million units.

Source:  www.bea.gov

U.S. Travel and Tourism Spending Strengthens in 3Q15

Real spending on travel and tourism increased by 4.3% (seasonally adjusted annualized rate) during the third quarter of 2015. This followed an increase of 8.4% in the second quarter. In comparison, real gross domestic product rose by 2.0% during the third quarter. The Bureau of Economic Analysis tracks the travel and tourism industry in the United State because it is an important source of jobs and economic activity, particularly here in Southern California. Additionally, foreign visitors traveling to the U.S. are an important source of export revenue.

Spending on travel-related goods and services was $839.6 billion during the third quarter of this year, compared with $830.9 billion in the previous quarter. Spending on traveler accommodations rose by 4.0%, while spending on transportation increased by 9.6% (passenger air transportation was up by 13.3%). Tourism spending at restaurants and bars ticked up by 1.0% but spending on recreation, shopping and entertainment declined by 1.7%.

Overall, prices for travel and tourism goods and services in the third quarter edged down by 0.3%. Prices were up in a number of sectors: accommodations (2.6%); food and drinking establishments (2.3%); recreation and entertainment venues (1.3%) and shopping (0.8%); but those gains were more than offset by falling prices for air transportation (-7.9%).

The travel and tourism industry has been a source of steady job growth since the second quarter of 2010. Direct employment in this sector increased by 2.2% during the third quarter after expanding by 1.6% in the previous quarter. All travel-related sectors posted a gain in employment, ranging from 4.0% for air transportation to 0.9% for traveler accommodations. During the third quarter, nearly 5.7 million workers were employed in the U.S. travel and tourism industry, which equated to about 4.0% of total nonfarm employment. 

  

Source: http://www.bea.gov/newsreleases/industry/tourism/tournewsrelease.htm

California State Tax Revenues Increase by 4.1% in 3Q15

The U.S. Census Bureau released figures for third quarter state and local tax collections by state and type of tax. At $211.5 billion, total state tax revenues collected across all fifty states (excluding Washington, DC) were up by 3.2% in the third quarter of 2015 compared with the same period in 2014. In California, tax revenues were up by 4.1% to $32.7 billion in the third quarter – a reflection of stronger economic growth and the improving health of state and local government finances within California.

Two of California’s three largest tax revenue categories reported increases in collections during the third quarter. General sales tax revenues rose by 3.0% to $9.0 billion, but were outpaced by the national increase of 4.4%. Personal income tax revenues were $15.6 billion in the third quarter, an increase of 8.9%. Nationally, personal income taxes were up by 6.2%. Personal income taxes are California’s largest revenue source (making up nearly half of all tax revenues collected in the third quarter), but personal income tax revenues are also notoriously volatile making budget planning and forecasting difficult.

California’s corporations paid $1.3 billion in income taxes during the third quarter, a decline of 17.6% compared with the same period a year ago. Corporate tax payments tend to be even more volatile than personal income taxes, but they count for a relatively small share of California’s “Big Three” revenue sources. Across the U.S., corporate income tax revenues edged down by 0.1%.

Other noteworthy changes include a 9.5% increase in California’s property tax revenues, the result of rising home prices, and a decline of 8.7% in motor fuel taxes, which help to fund expansion and maintenance of state’s roads and highways.

Altogether, sales and personal income taxes made up 67% of state revenues nationwide. California relies more heavily on these two revenue sources compared to other states. Sales and personal income taxes regularly contribute about 75% of total tax revenues received in a given quarter.

Source:    http://www.census.gov/govs/www/qtax.html

Personal Income Growth Strengthens in November

Total personal income in the U.S. increased in November by 0.3% on a nominal basis. Strong growth in employment and an increase in the number of hours worked supported an increase of 0.5% in total wages and salaries, which make up just over half of total personal income in the U.S.

Real disposable income (adjusted for taxes and inflation) rose by 0.2%. Real personal consumption expenditures, on the other hand, rose at a slightly faster rate – 0.3%. Accordingly, the personal saving rate dipped to 5.5% in November from 5.6% in October. Real spending on durable goods was up by 1.1% over the month, while spending on nondurable goods rose by 0.9%. Spending on services, which comprise 65% of consumer spending, was flat for the second month in a row.

On a year-to-year basis, incomes and spending moved higher in November:

• Real disposable income rose by 3.5% in November, slowing slightly from the October rate of 3.8%.
• Real personal consumption expenditures grew by 2.5%
• Growth in real spending on goods (3.6%) outpaced spending on services (2.0%) although in dollar terms, Americans spend more than two times as much on services as they do goods.

Consumer prices were unchanged over the month in November but edged up over the year by 0.4%. Excluding food and energy, prices advanced by 1.3%.

In addition to the national figures on personal income, the BEA also released a report on state personal income for the third quarter of 2015. In California, personal income increased by 1.4% compared with the second quarter of this year, slightly ahead of the national average of 1.3%. Personal income grew the fastest in Nebraska and South Dakota (both at 2.2%), while Alaska posted the slowest rate of growth at 0.6%. California ranked 14^th in terms of percent growth over the quarter. Compared with the third quarter of 2014, personal income in California increased by 6.5% versus 4.6% for the nation as a whole. 

Source:  http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm and http://www.bea.gov/newsreleases/regional/gdp_state/qgsp_newsrelease.htm

California Home Sales and Median Prices in November

The California Association of Realtors (CAR) recently released their report on California existing home sales and median prices in November. The statewide median price fell slightly (by 0.2%) compared with October to $475,000, but was up over the year by 6.8%.

The number of single-family homes in California that closed escrow in November fell by 1.6% over the year to 369,680 units (seasonally adjusted annualized rate). Compared with October, sales were down by 8.4%. This was the first time sales dipped below 400,000 since March 2015 and was the first year-over-year decline since January 2015.

Mortgage interest rates inched up in November, with the 30-year, fixed-mortgage interest rate averaging 3.94%, up from 3.80% in October, but below the year ago rate of 4.00%. The Federal Reserve’s recent announcement that it would raise the Federal Funds rate has been anticipated for a long time and should not initially have an adverse impact on the housing market since interest rates are still at historical lows. The CAR report noted that the increase might actually help home sales in the near-term. Potential buyers who had been hesitating may finally move now that interest rates are expected to begin a slow but steady rise over the next few years.

Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide sales figures are seasonally adjusted, regional and county figures are not.

Los Angeles County:  unit sales declined by 5.5% over the year in November, while the median price rose by 5.5% to $457,870.

Orange County: sales fell by 5.0% as the median price increased by 3.1% to $711,030

Riverside County:  sales of existing homes edged down by 1.4% and the median price moved higher by 5.1% to $337,200.

San Bernardino County:  sales slipped by 1.4% in November but the median price increased by 10.5% to $236,220.

San Diego County:  unit sales edged up by 0.8% and the median price rose by   12.8% to $554,440.

Ventura County:  sales declined by 5.4% over the year while the median price rose by 13.5% to $623,400.

Source: http://www.car.org/newsstand/newsreleases/2015releases/november2015sales?view=Standard