Active listings soar, possible leading to a buyers’ market
Higher mortgage rates and the devastating wildfires in Southern California greatly affected home sales in January, but new active listings increased at the fastest annual rate in two years.
A seasonally adjusted annualized rate of 254,110 homes sold in January, down 10% from December and off 1.9% from a year ago, according to the California Association of Realtors. January’s sales figure – based on how many homes would sell over a year – was the lowest in 13 months, and the double-digit month-to-month decline was the largest in 30 months.
However, the annual comparison – the best way to look at the market – is a bit misleading, since five of the seven regions in the state posted sales gains. Home sales plummeted 11% in the Far North, from about Chico to Eureka, and a much lower 3.6% in the Inland Empire, also known as Riverside and San Bernardino counties. The Central Coast, from Santa Barbara to Santa Cruz, had an 8.3% increase in sales from a year ago, the largest in the state.
‘SALES ARE EXPECTED TO REMAIN SOFT’
As sales decline, more homes are being listed. Active listings increased in 47 of the 52 counties surveyed in January. New listings were the highest since January 2020 but are far from the pre-pandemic levels.
“Home sales slowed last month, impacted by higher mortgage rates and the devastating wildfires in Southern California,” says CAR president Heather Ozur. “While sales are expected to remain soft this month and next, it is encouraging to see an uptick in new listings as the market gears up for the spring homebuying season. The improvement in supply conditions will offer buyers more options to choose from and allow some demand to be fulfilled as competition heats up in coming months.”
Perhaps, but at the current rate of sales – again largely because of higher mortgage rates and rising prices – there could soon be more homes listed than buyers looking.
January’s median home price – meaning half the homes sell for more, the others for less – was $838,850, down 2.6% compared to December and up 6.3% from a year ago. All seven regions had an increase in prices, including a 14.5% gain on the Central Coast and 10.7% in the Far North (see table, below).
Active listings “rebounded with the fastest year-over-year growth in nearly four years,” says Jordan Levine, chief economist for CAR. “With mortgage rates remaining elevates since late 2022, many homeowners are coming to terms with the fact that 3% rates aren’t returning anytime soon. As a result, more sellers are deciding to list their homes on the market.”
Home prices and sales in January compared to a year ago
| Region | Median home price | % gain or loss vs. a year ago | Home sales vs. a year ago |
|---|---|---|---|
| California | $838,850 | +6.3% | -1.9% |
| Bay Area | $1.13 million | +2.3% | +0.2% |
| Central Coast | $1.06 million | +14.5% | +8.3% |
| Central Valley | $480,000 | +4.3% | +1.1% |
| Far North | $400,000 | +10.7% | -11.0% |
| Inland Empire | $600,000 | +7.3% | -3.6% |
| Los Angeles | $820,000 | +9.3% | +1.4% |
| Southern California | $850,500 | +7.7% | +1.8% |
Source: California Association of Realtors