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‘White-hot’ market shows signs of cooling off
Wanna-be buyers competing for homes and dealing with a historic shortage of listings will enjoy some good news — the “market continues to normalize.”
Home prices and sales slowed for the third straight month in July, as buyers take a breather — or are perhaps priced out (CHN Blog, third item) — and more owners are selling, according to the California Association of Realtors.
July may have started with a bang, but it definitely fizzled in the final weeks.
Home sales dipped to an adjusted annualized rate of 428,980 in July, a 1.6% decline compared to June and off 2% from a year ago. Despite the decline, it was the second-best July in six years — and sales are up 27% for the first seven months of the year compared to the same period in 2020.
But clearly, the housing market — where bidding wars and offers of thousands of dollars over the listing price have been the norm — is slowing.
Active listings increased 15% in July compared to June, and are at the highest level since October 2020. And the state’s housing inventory, basically how long it would take to sell every home listed, inched up from 1.7 months in June to 1.9 months in July.
‘Sales and prices moderating’
Certainly, a small step back, but a huge one for frustrated home shoppers who have been competing with each other — and even investors — for more than a year.
“The California housing market continues to normalize from the white-hot conditions we experienced at the height of the pandemic with both sales and prices moderating as we slowly transition from the peak home-buying season into the fall,” says CAR president Dave Walsh. “The market remains solid … and the statewide median price continues to perform above last year’s level by double-digits. Housing supply, while improved, remains tight and market competition is still heated with homes flying off the market in record time (eight days).”
The state’s median home price ended its four-month record-setting pace, dipping to $811,170 in July — a 1% decline from June but up 21.7% from a year ago. It’s the fourth consecutive month above the $800,000 mark.
“California’s median home price remains elevated as supply constraints continue to provide upward pressure to support home prices,” says CAR vice president and chief economist Jordan Levine. “However, home prices should ease as housing inventory improves in the third quarter and the market continues to normalize during the traditional off-season.”
All of the state’s seven regions reported a drop in sales in July compared to a year ago, with the Far North — such as Eureka and Redding — experiencing the largest slide at 15.2%, followed by the Central Valley at 12%.
Home prices in every region reported double-digit gains compared to a year ago, but only the Far North reached a new record, as prices surged 25.7%.
The Bay Area is the most expensive region at $1.3 million, with five counties exceeding $1 million, including San Mateo at $2.11 million.
JULY HOME PRICES, SALES COMPARED TO A YEAR AGO BY REGION (RANKED BY PRICE)
- San Francisco: $1.3 million, up 23.9%; sales down 1.4%
- Central Coast: $869,500, up 10.8%; sales down 9.7%%
- Southern California: $760,000, up 22.1%; sales down 1.4%
- Los Angeles: $731,000, up 23.9%; sales down 2.1%
- Inland Empire: $529,000, up 26%; sales down 11.2%
- Central Valley: $451,950, up 19.7%; sales down 12%
- Far North: $400,000, up 25.7%; sales down 15.2%
Source: California Association of Realtors
Longtime business journalist-turned-communications executive who enjoys reporting on residential real estate in his spare time.