California’s Housing Market Continues to Struggle as Home Sales Decline for Fourth Straight Month
The California Association of Realtors (C.A.R.) reports that the state’s housing market is feeling the strain of persistently high mortgage rates, with home sales declining for the fourth consecutive month in September 2023. However, amidst this downturn, the median price of homes rose for the third consecutive month, marking its most significant year-over-year gain in over a year.
In September, closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 240,940, according to data compiled by C.A.R. This figure represents the projected total number of homes sold in 2023 if sales were to continue at the September pace, adjusted for seasonal variations.
The sales pace in September dropped by 5.4% from August, with 254,740 homes sold, and fell by 21.5% compared to the previous year when a revised 307,000 homes were sold. This marks the 12th consecutive month that sales have remained below the 300,000-unit pace and the 27th consecutive month of annual declines.
C.A.R. President Jennifer Branchini notes that the current market conditions provide opportunities for consumers, particularly those in need of personal home purchases or those who qualify for purchases at current interest rates. She observes that with reduced competition, sellers are more willing to make concessions, homes are taking longer to sell, fewer homes are selling above asking price, and there is a greater inventory for buyers to choose from.
Despite the decline in sales, home prices continued to rise. The statewide median price decreased slightly by 1.9% from August’s revised $859,800 to $843,340 in September but increased by 3.2% from $817,150 compared to the previous year.
While there was a slight month-to-month decline in median price, it aligns with the historical August-to-September price adjustment trend observed over the past four decades. Price fluctuations are expected to follow the seasonal pattern in the coming months, with year-over-year price growth anticipated to persist due to limited housing supply.
C.A.R. Senior Vice President and Chief Economist Jordan Levine predicts continued sluggishness in home sales in the coming months due to the surge in mortgage rates, which are at levels not seen in over two decades. The Federal Reserve’s plans to maintain higher rates for an extended period will likely keep borrowing costs elevated, particularly impacting affordability in the low- and mid-price ranges.
California’s Housing Market Grapples with Persistent Challenges in September 2023
The latest data from the California Association of Realtors (C.A.R.) sheds light on the ongoing struggles faced by the state’s housing market in September 2023. Despite some regions experiencing increases in home prices, overall sales continued to decline, inventory remained tight, and mortgage rates remained high.
Regional Sales Declines:
- All major regions in California witnessed a decline in home sales compared to the previous year, with drops exceeding 20%.
- The San Francisco Bay Area recorded the most significant annual sales decrease at -23.7%, followed by the Central Valley, the Far North, Southern California, and the Central Coast.
County-Level Sales:
- Forty-six out of 52 counties tracked by C.A.R. reported a decline in sales compared to the previous year, with 43 counties seeing drops of over 10%.
- Siskiyou, Mariposa, and Lassen experienced the most substantial declines in home sales.
- However, a few counties, including Mono, Sutter, and Madera, saw an increase in sales from the previous year.
Regional Price Trends:
- Despite the decline in sales, home prices increased in all major regions compared to the previous year.
- The San Francisco Bay Area saw the most substantial annual gain in median price, followed by Southern California, the Central Valley, Central Coast, and the Far North.
County-Level Price Changes:
- While many counties saw price improvements, 21 counties reported a decline in median prices compared to the previous year.
- Lassen, Lake, and Mendocino recorded the most significant price declines, while Mariposa, Calaveras, and Tulare saw substantial increases.
Housing Supply:
- Inventory continued to shrink statewide compared to the previous year, with the unsold inventory index remaining relatively unchanged.
- Active listings decreased in the majority of counties, with notable drops in Contra Costa, Sacramento, and Alameda.
- Mariposa, Amador, and Siskiyou were among the counties that experienced an increase in active listings.
Market Performance Indicators:
- The median number of days to sell a single-family home remained low at 18 days.
- The sales-price-to-list-price ratio remained steady at 100%.
- The average price per square foot increased to $417 compared to the previous year.
- Mortgage interest rates continued to rise, averaging 7.20% in September, up from 6.11% in September 2022.
Despite these challenges, the California housing market remains dynamic, with various regional nuances impacting sales, prices, and inventory levels.
California’s Housing Market Grapples with Persistent Challenges in September 2023
The latest data from the California Association of Realtors (C.A.R.) sheds light on the ongoing struggles faced by the state’s housing market in September 2023. Despite some regions experiencing increases in home prices, overall sales continued to decline, inventory remained tight, and mortgage rates remained high.
Regional Sales Declines:
- All major regions in California witnessed a decline in home sales compared to the previous year, with drops exceeding 20%.
- The San Francisco Bay Area recorded the most significant annual sales decrease at -23.7%, followed by the Central Valley, the Far North, Southern California, and the Central Coast.
County-Level Sales:
- Forty-six out of 52 counties tracked by C.A.R. reported a decline in sales compared to the previous year, with 43 counties seeing drops of over 10%.
- Siskiyou, Mariposa, and Lassen experienced the most substantial declines in home sales.
- However, a few counties, including Mono, Sutter, and Madera, saw an increase in sales from the previous year.
Regional Price Trends:
- Despite the decline in sales, home prices increased in all major regions compared to the previous year.
- The San Francisco Bay Area saw the most substantial annual gain in median price, followed by Southern California, the Central Valley, Central Coast, and the Far North.
County-Level Price Changes:
- While many counties saw price improvements, 21 counties reported a decline in median prices compared to the previous year.
- Lassen, Lake, and Mendocino recorded the most significant price declines, while Mariposa, Calaveras, and Tulare saw substantial increases.
Housing Supply:
- Inventory continued to shrink statewide compared to the previous year, with the unsold inventory index remaining relatively unchanged.
- Active listings decreased in the majority of counties, with notable drops in Contra Costa, Sacramento, and Alameda.
- Mariposa, Amador, and Siskiyou were among the counties that experienced an increase in active listings.
Market Performance Indicators:
- The median number of days to sell a single-family home remained low at 18 days.
- The sales-price-to-list-price ratio remained steady at 100%.
- The average price per square foot increased to $417 compared to the previous year.
- Mortgage interest rates continued to rise, averaging 7.20% in September, up from 6.11% in September 2022.
Despite these challenges, the California housing market remains dynamic, with various regional nuances impacting sales, prices, and inventory levels.
