Home sales slow for fourth-consecutive month in August
By Ron Trujilloemail@example.com
California’s fast-moving, record-setting housing market has definitely hit a speed bump, as home sales dropped below the 400,000 level in August, the first time below the magical mark in more than two years.
One-time aggressive buyers have become skeptical shoppers, as home sales in August dropped 1.8% from July and plummeted 6.6% from a year ago.
Several markets, including San Francisco, San Diego and Contra Costa counties, had double-digit declines compared to August 2017.
Statewide, active listings increased for the fifth-consecutive month, a dramatic turnaround from the previous 33 months of declines. Active listings jumped 17.2% in August compared to a year ago. Many of those active listings were in the $750,000-and-under price range.
Home prices are the primary reason consumers are holding off and even pulling back from purchasing. The median-home price inched higher to a record $596,410 in August, a modest 0.8% increase compared to July and up 5.5% from a year ago, according to the California Association of Realtors.
With each new price record, fewer families can afford to buy a home. Only one of every three households could afford to buy the median-priced home during the second quarter, the latest available figure from CAR.
“Home sales activity remained on a downward trend for the fourth straight month as uncertainty about the housing market continues to mount,” says CAR 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.”
That “clarity” could take at least a few more months.
“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,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “We are seeing more active listings increasing and more price reductions in the market, and as such, the question remains: ‘How long will it take for the market to close the price expectation gap between buyers and sellers?’”
Home prices, sales compared to a year ago
$1.55 million, up 12.3% Sales down 10.3%
$660,000, up 9.1% Sales down 10.4%
$607,490, up 6.4% Sales down 8.9%
$369,950, up 6.3% Sales down 2.2%
$286,000, up 13.3% Sales up 4.5%