California Home Sales Drop

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Home sales in California dropped for the third straight month in October, amid economic uncertainty among buyers, according to the California Association of Realtors.

A total of 401,170 of single-family homes were sold in California in October, dropping 2.7 percent from September and 11.1 percent from last year.

"As anticipated, the housing market was disrupted by the closure of the federal government in October, which prolonged the loan approval process and led to the delay of many home closings, especially on FHA transactions," CAR president Kevin Brown, said in the report. "That said, we are returning to a market that's more balanced than we've seen in recent years, with home price gains that are more sustainable and a sales pace that's characteristic of a normal environment."

The median price of existing single-family homes edged down 0.3 percent from $428,740 in September to $427,290 in October. However, the median is 25.3 percent higher than last year, representing the 16th consecutive month of double-digit annual gains.

Earlier this month, Dataquick found home sales in Southern California were sluggish, due in larger part to the increase in prices.

Statewide, the supply of single-family homes dropped to 3.4 months in October, from 3.6 months in September. The average days on the market for single-family homes increased to 33.1 days in October from 29.6 days the previous month.

The association expects a more stable market in the months to come.

"As housing demand has cooled off in recent months...the statewide median price is finally showing some signs of stability," CAR vice president Leslie Appleton-Young said in the report. "As we enter the slower home buying season, we expect home prices to be capped by seasonal factors and annual price gains to continue to taper off in the coming months."