California Home Sales Hit Lowest Level Since Great Recession, Prices Remain Strong

California Home Sales Hit Lowest Level Since Great Recession

In a recent report from the California Association of Realtors, it was revealed that the number of homes sold in California in November dropped to the lowest level since the Great Recession in the early 2000s. Statewide, the number of single-family homes sold last month fell to 223,940, marking a 7.4% drop from October and a 5.8% drop compared to the same time last year.

The report also highlighted that the statewide median home price dropped 2.2% from October but was up 6.2% from November 2022. The drop in sales was attributed to higher borrowing costs, high interest rates, and a limited supply of homes for sale.

Melanie Barker, president of the California Association of Realtors, stated that elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November. However, she also mentioned that with mortgage rates dropping to the lowest level in four months and the Federal Reserve indicating plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could re-enter the market early next year.

In specific counties like San Mateo and Santa Clara, home sales and median prices varied. While San Mateo County saw a 10.2% increase in home sales year-over-year, Santa Clara County experienced a 3.2% increase. However, both counties are expected to see a softening market in December due to the holiday season.

Jordan Levine, senior vice president and chief economist of the association, emphasized that the tight supply of homes for sale is keeping home prices from falling. He also mentioned that the recent decline in mortgage rates could motivate more sellers to list their homes in the upcoming spring homebuying season.

Overall, while the housing market is expected to improve slowly due to better mortgage interest rates, housing affordability problems will persist due to high home prices. Sellers are advised to be strategic and manage their expectations, while buyers are encouraged not to wait for interest rates to come down significantly. The real estate market in California is facing challenges, but there is optimism for a gradual recovery in the coming months.