By Nef Cortez
The California Association of Realtors (C.A.R.) reported that for the first time in nearly two years, the rate of home sales in California fell below the 400,000 level, with the annualized number of sales falling for the fourth straight month to 399,600. The sales rate declined 1.8 % from July, and down 6.6% from August 2017.
C.A.R. reported also that the statewide median home price was $596,410, up 0.8% from July, and up 5.5% from August 2017. This reflected a drop of nearly 24% from the previous year’s increase, dropping from 7.2% down to the 5.5% rate. In addition to that, the association reported that the statewide active listings rose for the fifth straight month, increasing by 17.2% over the previous year.
The key to these numbers is that the affordability of homes is reaching a point where less than 1/3 of the households can afford to purchase the median sale priced home in California.
“While home prices continued to rise modestly in August, the deceleration in price growth and the surge in housing supply suggest that a market shift is underway,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “We are seeing active listings increasing and more price reductions in the market, and as such, the question remains, ‘How long will it take for the market to close the price expectation gap between buyers and sellers?’”
C.A.R.’s August 2018 resale housing report also concluded that the Southern California region led the state’s sales decline, falling 8% from a year ago, with Orange and Los Angeles counties posting declines of 9.7percent and 8.9 percent, respectively. With more homes to select from, represented by the 17.2 percent increase in active listings on the market in August as compared to the previous year, buyers are taking longer to make a decision on which one to purchase. The number of days a listing is on the market also increased.
“Homes sales activity remained on a downward trend for the fourth straight month as uncertainty about the housing market continues to mount,” said C.A.R. President Steve White. “Buyers are being cautious and reluctant to make a commitment as they are concerned that home prices may have peaked and instead are waiting until there’s more clarity in the market”
This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at firstname.lastname@example.org, or website http://www.nefcortez.com. Please feel free to email any questions regarding real estate.