Slightly better mortgage rates and a dip in prices helped home sales reach a three-year high in November, though far from the pace of a healthy housing market.
A seasonally adjusted annualized rate of 287,940 homes sold in November, a 1.9% bump compared to October – and up 2.6% from a year ago, according to the California Association of Realtors. (If annualized sales are a bother, think about 24,000 homes were sold in November.)
Despite the boost, sales remain below the 300,000 level for the 38th consecutive months, ongoing evidence of a still-sputtering market. The 300,000 level has long been considered the minimum activity for a healthy market, with enough buyers and sellers.
‘AN ENCOURAGING SIGN’
Better-than-expected sales is “an encouraging sign that the housing market is continuing its recovery,” said CAR president Tamara Suminski, a Southern California broker. “While the sales growth remains gradual, the upward trend suggests that the market is slowly gaining momentum – good news for buyers, seller and real estate professionals alike.”
But that holiday cheer could become a Grinch-like feeling in December. November’s pending home sales declined 4.6% compared to a year ago, the first year-over-year drop in four months.
Five of seven regions reported a drop in sales in November from a year ago, with the Bay Area down 3.5%, the largest in the state.
LOWER PRICES HELP LIFT SALES
Home prices fell a larger-than-expected 3.9% to $852,680 in November compared to October, about the same price as a year ago.
The Bay Area – where the median-home price tops $1 million in six of the nine counties in the region – had the largest decline at 3.5%, followed by the Inland Empire off 2.5%.
The Far North, from about Chico to Crescent City, had the best price gain at 2.7%.
“Mortgage rates are expected to continue declining in 2026, but the decrease is unlikely to be dramatic,” said Jordan Levine, CAR senior vice president and chief economist. “With the Federal Reserve signaling a more cautious approach to rate cuts and recent signs of economic slowing, California home sales and prices are projected to experience mild to moderate growth over the next 12 months.”
The biggest hurdle for the housing market may not be home prices or interest rates, but the anemic economy, especially as job cuts are more common in recent months.
The average home enters escrow in about 32 days, compared to 26 a year ago. Housing inventory – how long it would take the current number of homes on the market to sell – climbed to 3.6 months in November, compared to 3.3 months a year ago. Total active listings increased for the 22nd straight month, another sign that homes are landing on the market but taking more time to sell.
Home prices and sales in November compared to a year ago
| Region | Median home price | % gain or loss vs. a year ago | Home sales vs. a year ago |
|---|---|---|---|
| California | $852,680 | +0.0% | +2.6% |
| Bay Area | $1.275 million | -3.2% | -3.5% |
| Central Coast | $1.033 million | +0.2% | -2.4% |
| Central Valley | $490,000 | -1.0% | -3.1% |
| Far North | $385,500 | +2.7% | +2.0% |
| Inland Empire | $585,000 | -2.5% | +0.1% |
| Los Angeles | $823,000 | +0.1% | -2.7% |
| Southern California | $860,000 | +1.2% | -3.1% |
Source: California Association of Realtors
