Is ‘normalcy” returning to the market? Well, sort of
California’s red-hot housing market cooled slightly during the first month of summer, as fast-paced home sales slowed for the second consecutive month in June — and the number of homes on the market reached the highest level in eight months.
Despite the decline in sales and increase in listings, the competition for homes remains strong, pushing the state’s median home price to a record for the fourth consecutive month — and the third month above $800,000, according to the California Association of Realtors.
“We’re starting to see what a difference just a slight uptick in inventory and listings can do to help lessen the buying frenzy and create a sense of normalcy,” says CAR president Dave Walsh.
Well, “normalcy” may be a stretch. About seven of every 10 homes sold above the list price in June, the average home entered escrow in eight days and new listings were off 12% compared to a year ago.
Slowing price gains, raising optimism for home-shoppers
And, perhaps most importantly, the median home price inched up to $819,630, a 0.2% increase compared to May — and up 30.9% from a year ago, according to CAR. It’s the fourth consecutive month of a new price record and the third straight month above $800,000.
But the month-to-month change, the smallest in the past four months, could give some hope to consumers looking to purchase. Still, more buyers continuing to compete for fewer homes coupled with the record-low mortgage rates will likely keep the sellers’ market in place.
“Tight supply, low rates and the change in the mix of sales continue to be the primary factors pushing up home prices to record levels,” says Jordan Levine, vice president and chief economist for CAR. “However, we are expecting price growth to slow from this point on as the top end of the market begins moderating. With pending sales down for the first time in 14 months, and closed sales — which have declined five out of the last six months — will likely remain lackluster as the market enters the second half of the year.”
The Bay Area, as always, was the priciest market, with five counties topping $1 million — and San Mateo reached a record $2.28 million. Orange and Santa Cruz counties also had median prices above $1 million.
Santa Barbara County had the largest annual percentage increase at 39% to $1.3 million.
Only two counties have a median home price of less than $300,000 — Lassen ($244,959) and Kings ($295,000).
Longtime business journalist-turned-communications executive who enjoys reporting on residential real estate in his spare time.