No Gifts From the Easter Bunny -- SoCal Housing Market Update: 4/11/23
Well hello everybody and welcome to a another Southern California Housing Market Update. This is for April 11 2023. My name is Stephen Meade with Domicile Real Estate, where we are on a mission to help California's renters become homeowners. I just got back from the California Association of Realtors Fair Housing day in Hollywood, California this morning. And I want to talk a little bit about where we are and about the Easter holiday, and what the Easter Bunny did not bring. And I will make you wait till the end of the video or tease you the Easter Bunny did not bring us more houses for sale. And really, it's it's, it's really I don't ever remember a spring that looked quite like this before. And I've said that a few times.
But every two weeks when we get the numbers on this, and I take a look at them. I'm still astounded. But the fundamentals and the reason why is sound and we understand why the spring is looking different than anything else. So let's go ahead and get into it. But just before we do, if you are looking to buy a home or looking to sell a home in Southern California, we would absolutely love to represent your interests. We also do webinars, I think we might have another one coming out. As many of you have heard, I should probably put this news out there. The California Housing and Finance agencies dream for all program was apparently a dream for only a few as it ran out of money in the less than two weeks. But we're putting together a webinar. I don't have a link for you guys. But I'll put it in there at a later date.
And that webinar is home buyer hacks. So it's really kind of a collection of kind of our favorite sort of loopholes and tricks. For first time homebuyers trying to get a leg up on the competition and trying to get ahead. But let's go ahead and get started with our whole market update. So the big news here is a trend that we've been seeing. And it doesn't show any signs of abating. And that is our inventory trend. And if you look here, our total number of active listings, declines again, especially in this under 1 million category, we are now at the point where we're almost at the same number of active listings that are a million dollars, as we were at at this point last year, that is really quite the reversal of last summer where we did see inventories grow to at least a decent degree. And we've really just kind of, you know, eaten up all that we've had a couple of few false starts on rising inventory.
But looking at the slope of this curve, it just I mean, this is really an a nosedive. And it's going to take a lot to kind of pull out of this. And I don't think it's going to happen. There's nothing fundamentally that's really going to sort of grow the ranks of listings and grow that active inventory on the market. If we look in our one to 2 million category, it's the same deal. We're almost at the same level, as we were in 2022. Something I've said in some of our other videos is 2023. The spring is starting to look a lot like the spring of 2022. In terms of competitiveness in the market. I still believe that's an accurate statement. So this is our total active listings. It's declining, but why? So now one reason you might think why is that we have included in the past two weeks an Easter holiday. And holidays are really interesting in real estate because they don't affect buyers and sellers the same way.
Typically, holidays prevent sellers from putting homes on the market, but much to a lesser degree, prevent buyers. So you have this kind of asymmetric thing that happens in a holiday where all the sellers say we want to wait a week and the buyers are kind of thinking, Well, if there's something interesting out there, we're gonna go write bids on it. And if you look here, though, that really wasn't a huge effect that these are the new listings in the last 14 days. That number really isn't often in fact, in our one to 2 million County Road actually increased ever so slightly. I do want to point out here though, let's compare to last year, so we are just under, you know, 2000 new listings in the last 14 days for under a million dollars.
What rate were we at last year just under 3000. So make no mistake, the market conditions we are seeing are a supply problem. It is a lack of housing supply, we are under supply. So you know we didn't really see new listings fall off in the last two weeks like you might expect for a holiday weekend. So I don't think the holiday is really playing a very big part in these numbers. Then if we look at the flip side of the demand, now we see something that's happening, right? Look at this. In the last two weeks, we saw jumps in the number of new escrows. You know, and we're at a level, let's see, the last time we were at this level of new escrows was all the way back in escrow in August of last year for under a billion dollars. And really even all the way far back in about the same point, September, August here for our one to 2 million. So really, if you look at this market, you can see this volume of new escrows kind of dropped and then really bounced back in the new year kind of held steady and then started growing again, even for our one to $2 million price level customers. And so what does all this add up to? Right?
What all this adds up to is an absorption rate that, to be honest, is not sustainable. And the reason it's not sustainable is because eventually you will run out of houses to sell if it keeps going. And I also want to point out, these absorption rates that we have seen since the end of January are consistently higher than we have seen in 2022. So in some ways, the 2023 spring market is actually more competitive than the 2022 spring market. And it's the same thing in our one to 2 million category here is watching just this sort of demand level bounce back, right like I mean since these low points, and to look at these numbers, right and where we are, you know, we're over 100% under a million dollars, and we are over 80% in one to 2 million right and over 100% is a circus like market like I want to emphasize here that if you are looking at a home under a million dollars, and it is a desirable home and is not grossly overpriced, it doesn't afford a rate railroad tracks without falling down a hill, you're going to see competitive activity most likely on that listing. Now if we look at our closed prices, I want to caution everybody here, this looks backwards, four to six weeks.
So you're looking at the past, right, we saw a spike in prices here, I think you're gonna see these bounce back in the 75th percentile, I think you're gonna see our median bounce back. And I think you're gonna see this entry level continue to go up as these weeks go on. So you have to look at this and bear in mind that we are looking at what were the market conditions four to six weeks ago, because this is based on closed sales, which have just closed right in the last two weeks. Now, if we look at another alternative measure of competitiveness, it's this percent that are still active, after 14 days on the market and look at where we are with this. Excuse me, look at where we are under a million dollars. I mean, we are at the levels that basically we were seeing last year.
And even if we're looking at one to 2 million, which is a little bit softer, that is still like at levels that we were seeing in May of last year. I remember April and May of 2022. And these were very competitive markets. And I think we're seeing something very similar today. Now, if we look at our close to list ratio, again, this is another one of those backwards looking statistics, because it is based on closed data. I'm gonna go screen share, because I want to give a little bit of an update on something that I'm excited about that has to do with this that I think is important. So if you watch this channel pretty regularly, one of my common and perennial complaints is that we don't really have great data on the sold listings, right we, we try to look at some other pieces of data to get an idea of sort of where things are today. But the other problem that we're looking at is our actual confirmation of that data is old, it's four to six weeks old, the MLS is working on aggregating, meaning taking a bunch of listing information and putting it together. So you don't see individual listing data.
They're looking at putting that together to sort of create more present on market stats, right like things, what is the in escrow price, or what is that close the list, we may be able to see that in real time for where the deals are negotiated. And that would be huge to be able to do that. So we're expecting to see that come online probably in the next nine to 12 months. I'm excited for that. Because obviously that's going to really change and give us just a lot more business intelligence and insight into where the market is exactly at this moment in time, which is always what I'm striving to give everyone who's watching so you can make better real estate decisions. As we look at our days on new market for new contracts.
This is data that's a little bit more recent, right? Because it's based on things that went into escrow in the last two weeks. And where are we We're basically right about 35 days. That is longer than we saw last year, but I'm looking at this trendline and I think this is going to head under 30 days shortly. I think the next time we look at this we might be under 30 days or right about 30 days, it's definitely heading in that direction. If you look at our three way chart, right, this is kind of interesting news. And what do you see are you see that our payment index actually went down? Right? That's good news rates are down.
And our rents have actually subsided slightly. And so it looks like the market seems to be pretty happy with this level of a gap. Right? This could be coincidental, but understand that these markets are tied to one another, when you have a limit on the amount of housing, right, like we do not have enough housing. Incidentally, that was a topic of the Fair Housing day today is that one of our fundamental problems is that fair housing violations go way up when there is a scarcity of housing. And because we are in a scarcity of housing, that means that you know, really, when you look at charts like this, if payments on homes drop, right, like so if we see this payment number goes down, what happens there is a group of people that are sitting in the middle, right? They are not sure, am I going to buy right now? Or am I going to rent.
So if that group of people in the middle, right, that's on that deciding bubble, they decide they're going to buy because payments are down a little bit? That's going to take people away who are looking at rentals, right? And that's going to cause a little bit of, you know, a lessening of that market demand, right? So I think what we're seeing in this, that's why you notice that these tend to move somewhat in similar directions. It's not always timed exactly right. But it's because there is kind of a symbiotic relationship between these two markets that we have to pay attention to. Finally, we've got our prevailing mortgage interest rates, these are based on a national scale, you see that they did, in fact, drop down again, the reality is, we're also seeing consumers are going for FHA loans, because they are in the low fives at the moment for 30 year fixed rate loans.
So suddenly loans that previously were not very attractive or becoming attractive to people. And that's kind of driving a bit of our demand. But like I said, the demand is kind of the story on page on page 10. Right, the headline, the front page news is really this complete lack of inventory, and a complete lack of replenishment of supply, we're just not seeing homes coming on the market, at the rate that we would expect during the spring. And these numbers to be honest, our I mean, these numbers are really down about 50%, almost, versus where they were last year, and that's really going to be the most dominant driving force in the market. And I've said this a couple times before, I just don't see it changing.
There is no looming foreclosure, boom, there is no and in fact, even the Exodus Out of California, right, even that has slowed down to some degree. And the big reason is, because interest rates went up. So if you're sitting in California with a 3% mortgage, or you're going to move to Texas, for a 6% mortgage, probably not and an increase in your property taxes. So you know, the only people we're really seeing moving out of California are retirees who own their homes free and clear can buy for cash elsewhere, because that interest rate is not a factor for them. So we're seeing a reduced California Exodus.
So those are homes that are not coming on the market. And we're also seeing a reduced move up market people who would put one home on the market and then buy another, another home. Again, because of that interest rate phenomena, it doesn't make a lot of sense for people to do that. So because of this big lock in effect, there's just not a lot of things that are pointing to inventory and new listings on the market going up. Al thank you so much for watching. As I mentioned, we do have another webinar coming out. I know you guys have been signing up for those. That's great when you sign up for those we like doing them we like giving people information that they're not always hearing elsewhere. We've got one coming up, we're calling it home buyer hacks.
So it's kind of just our favorite tips, tricks, loopholes, kind of little things that people haven't really been thinking about or advertising. So we'll obviously put out probably an email we might even make just like a little bit of a video advertising that when we're ready for that one to come out. Thank you so much for watching. We love having you questions and comments. We love them. If you are looking to buy or sell residential real estate in Southern California, namely Los Angeles and Orange Counties. That is how we keep the lights on how we're able to keep making videos like this. So definitely reach out to us. Don't forget to like subscribe and hit that notification bell and we will see you again real soon.