CAR: Sales slow, prices soar in January
By Ron Trujillofirstname.lastname@example.org
California’s housing market finally slowed in January, as existing home sales fell below the 400,000 level for the first time in almost two years, the latest evidence of the critical housing shortage.
Booming demand coupled with the declining inventory continued to lift home prices during the first month of the year, according to the California Association of Realtors.
Closed escrow sales dropped to 388,000 units in January, the first time the annualized rate — how many homes would sell at the current pace — dropped below 400,000 since May 2016.
January’s home sales were down 7.6% compared to December and off 2.9% from a year ago. The month-to-month decline was the largest in more than two years. Several major markets had significant year-over-year drops, including a 12% fall for Solano County. Home sales in San Mateo and San Francisco counties plummeted 9.5% and 8.8% compared to a year ago, respectively.
“A persistent shortage of housing inventory and continued affordability crunch is beginning to eat away at the market as buyers struggle to find available homes for sales,” says CAR president Steve White. “As such, we’re seeing a shift toward inland areas such as San Bernardino County in Southern California, and Placer, San Joaquin, Sacramento and Stanislaus counties, which are all adjacent to the inventory- and price-challenged San Francisco Bay Area.”
The unsold inventory index — basically how long it would take to sell the homes listed at the current sales pace — increased to 3.6 months in January, compared to 2.5 months in December. The better-than-expected figure is more about January being a historically slow sales period than more homes on the market.
The still-strong demand, despite affordability concerns and higher interest rates, continues to lift home prices. The state’s median-home price — meaning half the homes sell for more, the other half for less — increased 7.3% to $527,800 in January, compared to a year ago. Several major markets reported double-digit year-over-year gains, including 26.1% in Santa Clara County and 25% in San Mateo.
San Mateo remains the priciest market at almost $1.44 million, followed by San Francisco at $1.33 million and Marin County at $1.32 million. Siskiyou County is the most affordable, at least based on price, at $193,000.
“A tale of two markets continues to be the theme of California’s housing market with the lower end of the market bearing the brunt of the housing shortage as sales of homes priced under $300,000 declined by 17.2% from a year ago,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “At the other end of the spectrum where inventory is less constrained, homes priced $1 million and higher posted solid annual sales gains, especially in the $1.5 million to $2 million range, which jumped 24%.”
Prices around the state