Home Prices and Inventory Play Big Roles
According to the California Association of Realtors (C.A.R.), the number of home sales in California has fallen below 400,000, and below last month’s escrow closings. It’s been two years since existing single-family home sales hit that low of a mark.
“Home sales activity remained on a downward trend for the fourth straight month as uncertainty about the housing market continues to mount,” said C.A.R. president Steve White. “Buyers are being cautious and reluctant to make a commitment as they are concerned that home prices may have peaked and instead are waiting until there’s more clarity in the market.”
Home Prices Up . . . Modestly
This slowdown in rising prices is welcome news for would-be buyers, who are dealing with not only high home prices but also rising interest rates. The number of closed escrow sales tumbled to 399,600 units in August. That number was down 1.8% from the previous month. In July, there were 406,920 homes sales; down 6.6% compared to the number sold that month in 2017.
C.A.R. reports that rising home prices are a major contributor to the decline. Statewide, the median home price hit $596,410 in August. That number is up 0.8% from July and 5.5% year-over-year. Meantime, the average price-per-square-foot in California neared a statewide record of $283.
“While home prices continued to rise modestly in August, the deceleration in price growth and the surge in housing supply suggest that a market shift is underway,” said Leslie Appleton-Young, C.A.R.’s senior vice president and chief economist. “We are seeing active listings increasing and more price reductions in the market. As such, the question remains, ‘How long will it take for the market to close the price expectation gap between buyers and sellers?’”
Regionally, Southern California had the largest decline in home movement, with sales falling 8 percent, year-over-year. In San Diego specifically, sales fell 10 percent year-over-year. Orange and Los Angeles counties saw year-over-year declines of 10.4 percent and 8.9 percent, respectively.
Buyers can rejoice. Fewer homes being sold throughout California means more inventory. The ratio of over-sales, known as the unsold inventory index, rose from 2.9 month’s supply to 3.3 month’s supply, year-over-year. The unsold inventory index measures the number of months needed to sell homes currently listed. The number of days it took to sell those listings rose from 18 to 21 days, year-over-year.
The Perfect Time to Sell
Sellers can rejoice, too. Home prices remain steady in California…for now. In fact, the median sale price for a home in California is more than double that of the rest of the country. Rising interest rates combined with more inventory could affect prices in the near future. That’s why this is the perfect time to list your home.
Speaking of homes for sale in California, my current listings are priced for a variety of budgets: from the Montecito Charmer on a Country Lane pictured above and listed for $3,145,000, to a World Class Toro Canyon Estate, also pictured above, listed at $19,500.000.
There’s even more variety in the Featured Listings section of my website. You’ll find public listings that can also be found on the MLS, and private offerings that can only be viewed upon registration. If you would prefer to discuss the latest news in home sales, give me a call at +1.805.886.9378 or email me at Cristal@montecito-estate.com.