According to the California Association of Realtors, sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 344,970 in June 2022.
California's June home sales pace was down 8.4 percent on a monthly basis from 376,560 in May 2022, and down 20.9 percent from a year ago in June 2021, when 436,020 homes were sold on an annualized basis.
"California's housing market continues to moderate from the frenzied levels seen in the past two years, which is creating favorable conditions for buyers who lost offers or sat out during the fiercely competitive market," said C.A.R. President Otto Catrina. "With interest rates moving sideways in recent weeks and fewer homes now selling above listing price, prospective buyers have the rare opportunity to see more listings coming onto the market and face less competition that could force them to engage in a bidding war."
California's median home price declined 4.0 percent in June to $863,790 from the revised record-high of $900,170 recorded in May. The June price was 5.4 percent higher than the $819,630 recorded last June. The moderation in the median home price was due partly to a change in the mix of sales in June, as the high-end market started pulling back.
After increasing for four consecutive months, the share of million-dollar home sales dipped as sales in the higher-price segment dropped 8.3 percent from the prior month. Sales of homes priced $2 million and up, in fact, plummeted 17.9 percent from May 2022. The sub-$500,000 market, on the other hand, increased 2.1 percent on a month-to-month basis in June. More moderation will likely come in July as sharp declines in pending sales in the upper-price segments suggest a drag on the statewide median price in the upcoming months.
"Excluding the three-month pandemic lockdown period in 2020, June's sales level was the lowest since April 2008. Pending sales data also suggests we can expect additional retreating in the coming months," said C.A.R. Vice President and Chief Economist Jordan Levine. "With inflation remaining high and interest rates expected to climb further in the coming months, the market will normalize further in the second half of the year with softer sales and more moderate price growth."
As such, C.A.R. has revised its 2022 housing forecast and projects existing single-family home sales to reach 380,630 units in 2022, a decline of 14.4 percent from the 444,520 units sold in 2021. The latest estimate is a revision from the projection of 416,810 units sold released in October 2021. Despite a more moderate growth rate in the second half of the year, the California median home price is projected to increase 9.7 percent to $863,390 in 2022, a solid gain from the annual median of $786,750 in 2021. The updated projection on the statewide median price is an increase from the estimate of $834,440 forecast last October. C.A.R. also projects the average 30-year fixed mortgage interest rate to rise to the range between 6.25 percent to 6.5 percent by the end of 2022 and averaging 5.2 percent for the year.
With the market shifting, consumers were less positive in June about the state's housing market conditions, according to C.A.R.'s monthly Consumer Housing Sentiment Index. Conducted in June, 79 percent of respondents believed that the overall economic conditions in California will not improve in the next 12 months, while 85 percent believed that interest rates will not fall within a year. Only 14 percent of the respondents thought it was a good time to buy a home, a slight increase from the record low reached in May, but still a sizable decline from last June's 19 percent. While those who believed it was a good time to sell a home remained above pre-pandemic levels, the sharp monthly decline of 7 percentage points from 68 percent in May dragged the index down to the lowest level in 16 months.
Other key points from C.A.R.'s June 2022 resale housing report include: