California’s housing market rebounded in May as home sales surged to the highest level in eight months and the statewide median price perched above $800,000 for the second straight month, according to a recent report from the California Association Of Realtors.
Existing, single-family home sales totaled 289,460 in May on a seasonally adjusted annualized rate. This number is up 9.8 percent from April and down 23.6 percent from May 2022. At the same time, May’s statewide median home price was $836,110, which is up 3.0 percent from April, and down 6.4 percent from May 2022.
Year-to-date statewide home sales were still down 35.1 percent in May, however.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 289,460 in May, according to information collected by CAR.
The statewide annualized sales figure represents the total number of homes sold during 2023, if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales, the CAR report noted.
May’s sales pace was up 9.8 percent on a monthly basis from 263,650 in April and down 23.6 percent from a year ago, when a revised 378,640 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 300,000-unit pace for the eighth consecutive month.
“The bounceback in May’s home sales and price shows the resilience of California’s housing market and is a testament to the value that consumers place on homeownership,” said CAR President Jennifer Branchini. “The housing market is stabilizing and even showing signs of improvement as competition is on the rise again; nearly half of homes are selling above asking price, fewer sellers are reducing listing prices, and homes for sale are going into pending status in just two weeks compared to more than 30 days early this year.”
California’s median home price exceeded $800,000 in May for the second straight month, according to CAR, increasing 3.0 percent from April’s $811,950, to $836,110 in May.
The statewide median price reached the highest level in nine months.
Tight housing supply and increasing sales of high-end homes is continuing to put upward pressure on prices.
The median home price in California is also slipping, according to the report, and has now dipped 6.4% on a year-over-year basis for the seventh consecutive month, from $893,200 in May 2022.
Car is also predicting more negative annual price changes in the coming months as rates are expected to remain high in the third quarter of 2023.
“While home sales rose solidly in May, we don’t expect to see a rapid recovery because of the lock-in effect that’s keeping prospective sellers with low interest rate mortgages from listing their homes on the market and keeping inventory extremely tight,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “Consequently, we expect prices to continue to rise on a month-to-month basis for the next few months because of the shortage of homes for sale. Even with reduced homebuyer demand, California still has more homebuyers than homes to put them in. It is this imbalance between supply and demand that continues to put upward pressure on home prices and nudge the median price up month over month since the beginning of the year.”
Despite a significant month-over-month increase in sales, there was a substantial decline in sales compared to the same period last year, said the CAR report.
This suggests that “While there may be increased interest from buyers, the market continues to recover slowly from the impact of the previous year.”