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By Ron Trujilloemail@example.com
Falling home prices and sales could be a feast for potential buyers but are definitely a worry for homeowners and those in the real estate industry.
Existing home sales declined 3.9% in November compared to October, and plummeted 13.4% from a year ago, according to the California Association of Realtors. Statewide home sales have dropped for seven consecutive months compared to a year ago. Home sales also fell below the annual 400,000 mark for the fourth straight month.
Double-digit declines in home sales dominated throughout much of the state in November, from the Bay Area (down 11.5% from a year ago) to Los Angeles (off 10.1%). The Central Coast region, from Santa Barbara to Santa Cruz, had the largest plunge in sales at 18%. The Central Valley, from Bakersfield to Glenn County, had the smallest drop at 3.9%.
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‘Home prices have tapered and inventory has improved’
Would-be homebuyers are cautious with the uncertainty of the current homes prices and mortgages rates. In addition, affordability, though improved in recent quarters, remains near an all-time low. Fewer than three of every 10 families could afford the median-priced home during the third quarter, according to CAR.
“While many buyers continue to sit on the sidelines, serious buyers who are in a position to purchase should take advantage of this window of opportunity,” says Jared Martin, president of CAR. “Now that interest rates have pulled back, home prices have tapered and inventory has improved, home buyers’ prospects of getting into a home are more positive.”
Perhaps, but consumers, especially those who experienced the downturn a decade ago, are seeing more homes on the market and know the the basics of supply and demand. Active listings increased 31% in November compared to a year ago, the eighth consecutive monthly gain.
And the boost in homes on the market and slower sales are affecting home prices. The statewide median-home price — meaning half the homes sold for more, the other half for less — declined to $554,760 in November, a 3.0% drop compared to October and up 1.% from a year ago.
Bay Area home prices tops in state
The Bay Area remains the priciest region at $905,000 in the state, a modest increase of 0.6% from a year ago. San Mateo County is the most expensive market at $1.5 million, followed by San Francisco at $1.44 million. But even the Bay Area, which has four counties with $1 million-plus median-home prices, is experiencing a softer market.
Lassen County in Northern California is the most affordable in the state, at $184,000.
“The slowdown in price growth is occurring throughout the state, including regions that have strong economic fundamentals such as the San Francisco Bay area,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “The deceleration in home price appreciation should be a welcome sign for potential buyers who have struggled in recent years against low inventory and rapidly rising home prices.”
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Home prices, sales compared to a year ago
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$1.44 million, down 3.8%; sales down 12.2%
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$626,000, up 1.0%; sales down 11.0%
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$553,940, up 4.3%; sales down 11.2%
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$365,000, up 4.3%; sales down 7.1%
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$265,750, up 0.7%; sales down 2.9%
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