According to the California Association of Realtors (CAR), California home sales have now fallen for 17 straight months year over year. This latest measure is the fourth time in the last five months that sales dropped more than 30 percent from a previous year-ago level.
As expected, high-interest rates—which were put in place a number of times over the last year in an effort to put the brakes on inflation — continued to slow California housing market sales.
There were no interest rate raises in the US in December, which offered a brief respite from slumping sales, and helped to break a three-month sales slump.
Sales numbers have still remained below the 250,000 mark for the second consecutive month, however.
Southern California had a year-over-year price decline of 0.9 percent, with the median price being $1,084,500. According to the CAR, December’s home sales rose just slightly as some buyers were able to still take advantage of a slightly eased lending environment.
Sales of higher-priced homes are also dropping faster, even though sales of homes in every sales category are falling. Home in the price segment of $2,000k+ declined the most, dropping at 53% YoY rate. The numbers for pending sales were improved, however, moving up as mortgage rates slowed their rising
According to the CAR, the median home price in California decreased for the fourth consecutive month, now declining for six of the past seven months.
December’s median price of $774,580 was down 0.4% from November’s median price of $777,500. The December price was also lower year-over-year for the second straight month, falling 2.8% from the $796,570 recorded in December of 2017.
Even though California’s typical home price climbed by 4.5 percent in 2022, compared to 2021’s number of $786,750 2023 sales are projected to fall by 8.8 percent in 2023.
A lack of housing inventory remains one of the few factors stopping prices from plummeting, said the CAR.
In addition, according to the CAR, housing affordability is expected to drop to 23 percent next year from a projected 26 percent in 2021. As the trend of remote working continues, affecting where home seekers choose to live and buy, housing demand to more affordable places will keep prices in check and prevent the statewide median price from climbing too quickly.
