It appears a dearth of inventory and “eroding affordability ” are finally taking a toll on the California housing market. According to the California Association of Realtors, statewide home sales in January fell below the 400,000-unit annualized benchmark for the first time in two years, as sales declined on both a monthly and annual basis.
Single-family homes in California sold at an annualized rate of 388,000 units in January. That was down 7.6% from the previous month, which saw a 420,960 annualized rate; and down 2.9% from January 2017. The month-to-month decline was the largest in more than two years for the California housing market.
Note, the statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the January pace throughout the year. It’s adjusted to account for seasonal factor that can influence home sales.
C.A.R. President Steve White pointed out the continued market fundamentals of the California housing market–low supply and low affordability—are beginning to manifest.
“A persistent shortage of housing inventory and continued affordability crunch is beginning to eat away at the market as buyers struggle to find available homes for sale,” White said.
While home sales sputtered in January, prices continued to grow at a strong pace. The median price of a home in January was $527,800, which was down 4.0% from December but up 7.3% from January 2017. C.A.R. notes year-over-year prices have grown at or above 7.0% for seven of the past eight months.
The Los Angeles metro region saw a 3.6% drop in home sales in January.