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Home sales plunge in September; fall for fifth consecutive month

Affordability has become a serious concern for would-be buyers, as interest rates near 5%, causing sales to slide plummet statewide.

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By Ron Trujillo/ron@calhomenews.com

A fall freeze is following the sizzling summer, as home sales suffered their largest annual decline in more than four and a half years in September, the latest sign of a sputtering market.

Real estate officials cite affordability concerns as higher interest rates and home prices are making many would-be homebuyers rather wary. Home sales slowed for the fifth-consecutive month.

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Annualized home sales declined to 382,550 in September, a 4.3 dip from August — and off 12.4% compared to a year ago, according to the California Association of Realtors. Statewide active listings, the number of homes on the market, increased for the sixth-consecutive month and inventory reached a 31-month high.

It was an across-the-state slowdown, with home sales in Southern California plummeting 22% from a year ago, the largest regional drop in the state. Bay Area sales declined 16.4%, the largest for the region since October 2010. And even the Central Valley was off 15.1%.

“The housing market continued to deteriorate and the decline in sales worsened as interest rates remained on an upward trend,” says CAR president Steve White (photo, left). “More would-be buyers are self-sidelining as they believe home prices will start to come down soon, making housing more affordable despite rising interest rates. Tax reform, which increases the cost of homeownership, also is contributing to the decline, especially in high-cost areas such as the San Francisco Bay Area and Orange County.”

Cooling off sales are affecting the median home price, which dipped 2.9% from August, but up 4.2% from a year ago, according to CAR.

“Price appreciations have slowed in the last few months and inventory has risen considerably since June when the statewide median price hit a new peak,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “Buyers are becoming increasingly concerned about market developments and are reluctant to purchase at the prevailing market price. As such, the deceleration in price growth will likely continue in coming months.”

San Mateo was the most expensive housing market at $1.6 million, followed by San Francisco at $1.51 million. Two other Bay Area counties, Marin and Santa Clara, topped the $1 million mark in September.

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Home prices, sales compared to a year ago

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$1.507 million, up 11.7%; sales down 11.5%

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$640,000, up 5.8%; sales down 15.6%

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$634,680, up 4.7%; sales down 22.0%

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$372,000, up 7.0%; sales down 13.8%

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$267,000, up 0.8%; sales down 14.5%

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