California's real estate markets have evened out in recent months. The
red-hot price gains achieved early in the year have given way to relative stability. The
state's median home price appears to have reached a plateau around $465,000. The
pace of home sales remains strong but has also leveled off. Both developments
will be welcome news for the state's home affordability.
- California's industry employment rose 8,700 in November,
the state's fourth consecutive monthly gain. Even though it was considerably less than
the 42,400 job gain in October, the four-month total gain was 63,700. On
a year-over-year basis, nonfarm employment in October was up nearly 146,900,
or 1.0 percent.
- November's job gains were led by Information, which added 7,200 jobs. Construction
gained 5,400 jobs; Trade, Transportation and Utilities, 4,300; Educational
and Health Services, 1,600 jobs; Financial Activities, 1,300; and Leisure
and Hospitality, 1000. Losing industry sectors were led, unusually,
by Professional and Business Services, which dropped 5,800 jobs. Government
lost 4,400 jobs; Other Services, 900; Manufacturing, 700; and Natural Resources
and Mining, 300.
- Over the last 12 months, industry employment rose by 65,500 in Professional
and Business Services; 35,500 in Construction; 23,900 in Trade, Transportation
and Utilities; 21,700 in Leisure and Hospitality; 20,800 in Educational and
Health Services; 8,500 in Financial Activities; and 1,200 in Manufacturing. Employment
fell by 22,200 in Government; 3,800 in Other Services; 3,600 in Information;
and 600 in Natural Resources and Mining.
- After accelerating for three months in a row, home building slowed sharply
in October. Permits were issued for 173,000 residential units on a
seasonally adjusted annual rate basis. This is the slowest pace since
December 2002, and a 24-percent slowdown from September. The deceleration
was spread evenly across both single-family and multi-family sectors.
- California's real estate markets appear to have transitioned to a calmer,
yet more sustainable, environment. Much of the dramatic pick-up in
home prices and sales occurred in the midst of 2003 or in the early months
of 2004. For the most part, real estate markets have been much more
stable recently. While on a year-over-year basis home prices are up
more than 20 percent, month-to-month gains since April have averaged barely
3 percent on an annualized basis. The pace of home sales accelerated
over 7 percent during the first six months of 2004, compared to the same
months of 2003. However, they have actually slowed from their year-ago
pace during the most recent four months.
- The pace
of home sales in California increased modestly in October. Existing
single-family home sales reached a seasonally adjusted annualized rate of
639,570 units, a 2-percent acceleration from September. The California
Association of Realtors' Unsold Inventory Index—the number of months
needed to deplete the supply of homes on the market at the current sales
rate—was 3.7 months in October. It stood at 2.1 months in
- Home prices dropped for the second consecutive month in October, staying
within the narrow range they have been in since May. Residential price
inflation is still running strong in several regions, but it is balanced
by flat or softening prices in many other areas. The median price of
existing single-family homes sold dropped to $460,370, a 0.7 percent decline
Prices & Sales Flatten Out
Preliminary General Fund agency cash for November was $30 million
below the 2004 Budget Act forecast of $5.463 billion. Year-to-date,
revenues are $1.045 billion above expectations. .
- Personal income tax revenues were $66 million above the month’s
forecast of $2.286 billion. Withholding was $77 million above
the estimate of $2.262 billion, 24.4 percent above the year-ago level. Other
receipts were $77 million above the $298 million estimate. These
gains were partially offset by refunds, which came in $88 million
higher than the forecast of $274 million. Year-to-date collections
are $356 million above forecast.
- Sales and use tax receipts were $23 million
below the month’s forecast
of $2.668 billion. November cash includes the final payment for third
quarter sales, as well as the first prepayment for fourth quarter sales. Through
November, the sales tax is $10 million below the forecast of $10.143 billion.
tax revenues were $51 million below the month’s forecast of
million. November receipts are often negative due to refunds exceeding
payments. Other payments, primarily audit and settlement moneys, were $8
million above the estimate of $97 million. However, prepayments and refunds combined to more than
offset the small gain in other payments. Prepayments were $18 million
below the estimate of $123 million and refunds were $41 million above
the estimate of $270 million. Although refunds were greater
than expected, this may just be a cash flow effect. Refunds could
have been accelerated from December, which is typically the largest month
for this component.
- To date, this tax is up $556 million from
forecast.Revenues from the insurance, estate, alcoholic beverage, and tobacco
taxes came in $10 million above the $79 million that was expected,
due to strength in the estate tax. The remaining revenues—pooled
money interest income and “other” revenues—were $32 million
below the month's estimate of $480 million, due to lower-than-expected "other" revenues. .
General Fund Agency Cash
2004-05 Budget Act Forecast
2004-05 Comparison of Actual and Forecast
Agency General Fund Revenues
For more information, please contact the California
Department of Finance,
Room 1145, State Capitol, Sacramento, CA or call (916) 323-0648.
to the Department of Finance Home Page