Real Estate Innovation Supporting California’s Housing Market Recovery in 2020
Housing prices remain stable, but state could experience large loss in $72B in economic activity if statewide real estate transaction volume does not fully rebound
|Aug 19, 2020|
Download REX Analysis – COVID-19 Impacts On The California Housing Market, July 2020
(LOS ANGELES, CALIFORNIA, Tuesday, August 18) - REX, the real estate technology company connecting residential real estate buyers and sellers and the lowest transaction costs in the industry, has announced national sales figures in July were the highest in the company’s history. Nationwide REX experienced a 123 percent increase in homes going into escrow from April to July – despite the impacts of the novel coronavirus.
Public data compiled and analyzed by REX’s data team, led by Chief Data Scientist Andy Terrel, shows California’s housing market experienced significant impacts in the spring and summer months of 2020, but continues to rebound thanks to innovation and high consumer interest in buying and selling real estate.
“In the early months of 2020, California saw immediate setbacks on several fronts including homeownership and real estate-related employment,” said Terrel. “According to public data, average housing values in California remained stable, but the nationwide total loss in economic activity could exceed $72 billion in total real estate transaction volume and $3.2 billion in attendant services and construction.
With the nation’s largest housing market, much of that pain will be felt in the Golden State.”
Prior to the COVID-19 crisis, California homeownership in 2019 sat at 55 percent and had not fully recovered from the 2006 Great Recession high of 60 percent. Statewide single family home (SFH) sales in May 2020 showed a year over year (YOY) drop by 41 percent – the largest such slowdown since November 2007. Local markets were also impacted by the crisis. In May 2020, Sacramento County SFH sales were down 44 percent YOY with Bay Area SFH sales posting a 51 percent drop and Los Angeles experiencing a 46 percent reduction.
California’s housing volume was also impacted with May 2020 active listings falling from 65,000 to 49,000 YOY. The volume of active listings fell in every price category except the luxury market, where active listings were actually up 2 percent for homes selling in the $2-3M range, and up 19 percent for homes selling the $3M+ range.
Housing values in May 2020 remained relatively stable with the median sales price for single family homes in May 2020 registering at $590,000, down just 3 percent from April and 4 percent from May 2019.
REX currently operates in seventeen markets across the United States including Southern California, the Bay Area, and Sacramento. California-specific data at REX shows why the state remains the largest market in the company’s portfolio and provides some insights into the role technology innovation is playing in helping the state’s real estate market recover from the coronavirus pandemic.
Californians are increasingly contacting REX about selling their home in 2020. Statewide seller leads at REX are up 297 percent as of July 31 compared to April 1. Over the same period of time, leads were up by 410 percent in Sacramento, 125 percent in the Bay Area, 307 percent in Los Angeles, and 441 percent in Riverside.
Requests for showings of REX listings are also on the rise – thanks to new features that automate and dramatically improve virtual showings during shelter in place orders due to the coronavirus pandemic. As of July, requests to tour one of the company’s California listings has increased 120 percent in comparison to figures from April. Over the same period of time, requests were up by 410 percent in Sacramento, 125 percent in the Bay Area, 307 percent in Los Angeles, and 6 percent in Riverside.
REX is also experiencing record high escrow figures across California, with a 70 percent statewide increase in July compared to April. Escrows at REX in large and small metro markets across California were also up in July compared to April: 300 percent in Sacramento, 400 percent in the Bay Area, and 50 percent in Los Angeles.
“This is just another proof point for our consumer-driven business model. Our company was founded in California, the global hub for innovation and one of world’s best real estate markets, and we are pleased to be part of the solution for housing affordability and safety as we all work together to recover from COVID-19,” said Jack Ryan, REX’s Co-founder & CEO. “Together we can regain the losses from early 2020, building on high consumer demand and a strong appetite for technology innovation, convenience and savings.
At REX, we will continue to bet on the consumer and focus on meeting their needs.”
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