October sales get scary; home prices still a treat
By Ron Trujilloemail@example.com
California home sales remained rather scary in October, as sales dropped for the sixth straight month as mortgage rates reached a seven-year high.
Existing home sales increased 3.8% compared to September, but were off 7.9% from October 2018, according to the California Association of Realtors. Higher home prices and mortgage rates are causing a wait-and-see approach for many would-be buyers, who continue to deal with affordability issues.
Southern California, easily the largest housing market in the state, had the largest drop in sales. San Diego County sales plummeted 13.2% from a year ago, while Orange and San Bernardino counties fell 11.3% and 11.4%, respectively.
“Homebuyers continued to put their homeownership plans on hold in October and wait out the market,” says CAR president Jared Martin. “With mortgage rates at seven-year highs making homeownership more expensive and home prices beginning to flatten, this phenomenon will likely continue for the near term as buyers wait for further price adjustments and for interest rates to stabilize.”
More homes are listed for sale — and they are staying on the market longer, according to the CAR report.
The unsold inventory index, basically how long it would take to sell all the homes on the market, increased to 3.6 months in October, compared to 3.0 months a year ago. The index has increased seven consecutive months. Also, how long homes remain on the market increased to 26 days, from 21 days a year ago.
Despite the decline in sales, the median-home price — meaning half the homes sold for more, the other half for less — climbed to $572,000, a 4.7% increase compared to a year ago. The Bay Area, the priciest region in the state, had four counties above the $1 million mark. Only two counties were below $200,000: Lassen ($148,000) and Siskiyou ($181,500).
“October’s sales decline was not as severe as the double-digit drop experienced in September, but the continued pullback in sales suggests the market will continue to slow and likely soften further into 2019,” says Leslie Appleton-Young (photo, left), senior vice president and chief economist for CAR. “Likewise, as home sales continue to soften, the median price … will also ease up.”
Photo of San Joaquin Valley homes by Richard Thornton/Shutterstock
Home prices, sales compared to a year ago
$1.6 million, up 0.4%; sales up 5.2%
$810,000, up 3.1%; sales down 11.3%
$635,500, up 5.4%, sales down 13.2%
$614,500, up 5.9%; sales down 5.9%
$360,000, up 2.9%; sales down 3.1%