California’s housing market dropped below the 400,000-level sales benchmark for the first time in more than two years as high home prices and eroding affordability combined to cut into housing demand, the Arcadia Association of Realtors (AAR) said recently.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 399,600 units in August, according to information collected by the California Association of Realtors from more than 90 local realtor associations statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
August’s sales figure was down 1.8 percent from the revised 406,920 level in July and down 6.6 percent compared with home sales in August 2017 of 427,630.
“Home sales activity remained on a downward trend for the fourth straight month as uncertainty about the housing market continues to mount,” said AAR President Margaret Garemore. “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.”
The statewide median home price edged up to $596,410 in August. The August statewide median price was up 0.8 percent from $591,460 in July and up 5.5 percent from a revised $565,320 in August 2017.
“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 AAR CEO Andrew Cooper. “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?’”