Residential Real Estate News
California Home Sales Hit 7 Month Low in August, Despite Lower Rates
New data from the California Association of Realtors shows that California's statewide home sales hit a seven-month low in August 2024, as buyers paused despite mortgage rates reaching their lowest point since spring 2024. Closed sales of existing, single-family detached homes totaled an annualized 262,050 in August, based on figures from 90 local Realtor associations and statewide MLSs. This annualized number reflects what the total home sales would be if the pace of sales in August continued throughout the year, adjusted for seasonal variations.
Sales in August 2024 dropped by 6.3% from the 279,810 homes sold in July, but were up 2.8% from August 2023's adjusted total of 254,820 homes. The sales rate has remained below 300,000 for 23 consecutive months, though year-to-date home sales saw a modest increase of 0.5% compared to the same period in 2023.
"Home price growth continued to ease in August as we approach the end of the traditional home-buying season," said C.A.R. President Melanie Barker. "With the Federal Reserve signaling an upcoming reduction in interest rates, mortgage rates should fall, improving housing affordability and offering buyers lower borrowing costs in the coming months."
California's median home price in August was relatively unchanged, rising just 0.2% from $886,560 in July to $888,740. This was 3.4% higher than the revised $859,670 median from August 2023, marking the 14th consecutive month of year-over-year price growth, although this was the smallest increase since September 2023. Home prices may soften further in the coming months, but year-over-year growth is expected to continue for the rest of the year.
Sales in the higher-priced market segment continued to influence the statewide median price, though the impact has lessened in recent months. Sales of homes priced over $1 million slowed by 3.6% in August, and sales in the sub-$500,000 market also underperformed, declining 9.0% compared to the previous year. If the share of homes priced over $1 million continues to shrink this fall, the median price growth could moderate.
"Despite a slightly improved lending environment in recent weeks, closed sales in August declined as buyers weighed whether to wait for the Federal Reserve to lower rates," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "However, pending sales and mortgage application trends suggest that housing demand has been gradually improving. If rates stay low or drop further, home sales should increase steadily toward the end of the year."
Key points from C.A.R.'s August 2024 housing report include:
- Regionally, home sales in most major areas of California were up compared to a year ago. The San Francisco Bay Area led the increases with a 4.8% rise, followed by the Central Coast (3.0%) and Central Valley (0.8%). The Far North (-5.0%) and Southern California (-2.3%) saw declines.
- Out of 53 counties, 26 recorded year-over-year sales increases, with 10 counties posting gains above 10%. Yuba led with a 37.1% increase, followed by Mendocino (25.6%) and Glenn (25.0%). On the other hand, 27 counties experienced declines, with Trinity (-50.0%) seeing the largest drop.
- Median home prices increased in all major regions except the San Francisco Bay Area, which saw a 1.6% decline. The Central Coast had the largest year-over-year price increase at 8.9%, followed by the Far North (7.7%) and Southern California (4.0%).
- Thirty-six counties reported year-over-year median price gains, led by Trinity (36.6%), Plumas (32.9%), and Imperial (22.0%). Sixteen counties saw price declines, with Santa Barbara dropping the most at 18.0%.
- The statewide unsold inventory index rose to 3.2 months in August, up from 2.9 months in July and 2.4 months in August 2023, with active listings increasing by more than 39% year-over-year.
- Inventory grew in nearly all counties except four, with Alameda (124.4%) posting the largest year-over-year increase in active listings.
- The median time to sell a home in California was 22 days in August, up from 17.5 days in August 2023.
- California's statewide sales-price-to-list-price ratio remained at 100% in August, unchanged from a year earlier.
- The median price per square foot for an existing single-family home was $427, up from $416 in August 2023.
- The 30-year fixed mortgage rate averaged 6.50% in August, down from 7.07% in August 2023, based on Freddie Mac data.
