How is the California housing market right now?
In September, the sales of homes in California slowed down because interest rates went up. C.A.R. says that home sales have gone down for 15 straight months compared to the same time last year. In the last three months, sales have dropped by more than 30% compared to the same time last year. The monthly drop in sales of 2.5% was worse than the average drop of 0% between August and September over the past 43 years.
All price ranges saw sales drop by 25% or more from the previous year, with the drop in the sub-$300,000 price range being the largest (36.7%). For the fourth month in a row, sales of million-dollar homes fell by more than 10%, with the high-end market down 25.6% from the same month last year.
In September, there were 305,680 closed escrow sales of existing single-family detached homes in California. This was based on a seasonal adjustment. The number of homes sold in September was down 2.5 percent from August (313,540 sales) and down 30.2 percent from a year ago (438,190 sales).
The prices of homes in California went up from one year to the next, but not as quickly as they did earlier this year. The average price of a home in every state in September was $821,680. It was the fourth month in a row that year-over-year growth was less than 10%, with a gain of 1.6%. The average rate of price growth over the past six months, from March to August 2022, was 6.7%, which was much higher than the rate of price growth over the past year, which was less than 2%.
Will house prices go down in 2022 USA?
Since the beginning of the year, interest rates have gone up quickly, making it hard for buyers and sellers to adjust to the new “normal” of the market, according to C.A.R. President Otto Catrina, a Bay Area real estate broker, and REALTOR®. “As the market continues to change in the next 12 to 18 months, REALTORS® will play an even more important role as trusted advisors to guide their clients through the complicated buying and selling process and help them get through these tough times.”
At the regional level, home sales in all of California’s major regions have gone down since last year. In four of the five major regions, sales have gone down by more than 25% since last year. The prices of homes went up in every major area of California except the San Francisco Bay Area.
The median price in the San Francisco Bay Area fell by 2.6% from one year to the next, to $1,256,500.
Prices on the Central Coast went up by 3.7% in the past year, and the median price was $920,000.
Prices in Southern California went up by 3.8% in the past year, with the median price being $783,380.
The median price of homes in the Central Valley went up by 1.3% in the last year, and the median price was $456,000.
The Far North had the most growth from one year to the next, with a 2.7% increase and a median price of $380,000.
C.A.R. has lowered its housing prediction for 2022 based on how the market is changing right now. Because of a lack of homes for sale and higher prices, California home sales will go down a little in 2022, but they will still be at the second-highest level in the last five years. The median home price in California is expected to go up by 5.2% to $834,400 in 2022. This comes after it is expected to go up by 20.3% from $659,400 to $793,100 in 2021.
In 2022, it is expected that 416,800 single-family homes will be sold, which is 5.2% less than what is expected to happen in 2021 (439,800). The proportion of people who can afford to buy a home is expected to drop from 26 percent in 2021 to 23 percent in 2020. Also, as the trend of working from home continues, people will look for places to live that are less expensive. This will keep prices in check and stop the statewide median price from going up too quickly in 2022.
This week’s California real estate trends and predictions (October 1, 2022)
C.A.R. says that there are fewer buyers because mortgage rates are going up, which makes it harder for people to buy things. And since the new inflation number is high, we should expect that the Fed will raise interest rates even more at their next meeting. Also, REALTORS® who have been surveyed in the last month are becoming less optimistic, and buyers and sellers are still getting used to the new market conditions.
But the market has become less competitive, and more sellers are willing to negotiate or offer buyer incentives. Even though a small recession is expected in 2023, the long-term prospects for continued price growth in California may continue to attract buyers who still qualify at higher rates but who stayed away during the last two years of madness.
Since April 2022, the number of Realtors® who think sales will go up in the near future has been steadily going down. In October, only 4.6% of Realtors® thought sales would go up in the near future. This is the lowest number since C.A.R. members started being polled soon after the pandemic started. The study also showed that fewer members think that listing prices will go up. At the beginning of the year, half of the people who answered the survey thought that listing prices would go up, but this month, only one in five do.
As it has for the last five months, the number of people who think prices will go up stays in the low single digits. Members say that there is less demand, but because there aren’t many listings, the supply is still pretty tight. According to the most recent monthly REALTOR® survey from C.A.R., the number of sellers who are hesitant to put their homes on the market has been going up since May. In October, it reached 36%, which was the second-highest level of the year.
Also, 25% of REALTORS® polled said that a customer took their house completely off the market in October, which is the most since the survey began more than two years ago. After slowly going up from a low of 5% in April, more REALTORS® are reporting price drops for sellers who kept their homes on the market. But the number of people who said their clients lowered their asking price in October went down from 43% in September to 39% in October.
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