January sales tumble to lowest level in 10 years
Home listings climb 27%, increase 10 straight months
California home sales dropped to the lowest level in more than a decade in January, the latest evidence that the once-booming housing market is fast-becoming a buyers’ market.
Annualized home sales plummeted to 357,730 units in January, a 3.9% decline compared to December — and off 12.6% from a year ago, according to the California Association of Realtors. January was the ninth consecutive month of declining sales, and the sixth straight month below 400,000, considered the level for a stable and strong market.
A boost in the housing supply and fewer sales pushed the median-price home to $538,690 in January, a 3.4% decline from December but up 2.1% from a year ago.
‘A more balanced market’
January’s home sales were the lowest since April 2008, when the market started to tumble during the housing meltdown and the Great Recession.
“California continued to move toward a more balanced market as we see buyers having greater negotiating power and sellers making concessions to get their homes sold as inventory grows,” says CAR president Jared Martin. “While interest rates have dropped down to the lowest point in 10 months, potential buyers are putting their homeownership plans on hold as they wait out further price adjustments.”
California continued to move toward a more balanced market as we see buyers having greater negotiating power and sellers making concessions to get their homes sold as inventory grows. — CAR president Jared Martin
Long-term mortgage rates are at the lowest level in more than a year, but consumers concerned about record-high home prices in many regions are holding off purchasing. And fewer than 30% of families could afford the median-priced home in the state during the fourth quarter, according to CAR.
The number of homes on the market increased 27% in January compared to a year ago, and have risen 10 straight months. The average home sold in 37 days vs. 27 days a year ago.
But don’t blame the federal shutdown for the slowdown.
“While we expected the federal shutdown during most of January to temporarily interrupt closings because of a delay in loan approvals and income verifications, the impact on January’s home sales was minimal,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “The decline in sales was more indicative of demand-side issues and was broad and across all price categories and regions of the state. Moreover, growing inventory over the past few months has not translated into more sales.”
The Bay Area remains the most expensive region in the state, with four counties above $1 million, led by San Mateo at $1.45 million. Rural Siskiyou County is the cheapest at $151,000, or almost $390,000 less than the median-home price.
Home price, sales compared to a year ago
$1.33 million, no change; sales up 3.2%
$610,000, up 3.4%; sales down 10%
San Luis Obispo
$592,500, up 4.9%; sales down 25.9%
$566,010, up 0.3%; sales down 14.2%
$352,250, up 0.6%; sales down 20.9%
$271,720, up 9.1%; sales up 12.4%
$270,000, up 6.5%; sales down 6.3%
Active listings increased 27% in January compared to a year ago, and have now risen 10 straight months.
Those listings would take about 4.6 months to sell, compared to 3.6 months in January 2018.
Time on the market
The average home on the market sold in 37 days in January vs. 27 days a year ago.