Based on new data from the California Association of Realtors, California home sales were essentially flat in October 2023, as the cost of borrowing remained elevated and housing inventory continued to be tight.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 241,770 in October, according to information collected by C.A.R. The statewide annualized sales figure represents what would be the total number of homes sold during 2023 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
October's sales pace was up 0.3 percent on a monthly basis from 240,940 in September and down 11.9 percent from a year ago, when a revised 274,410 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 250,000-unit pace for the second consecutive month. The annual decline was the 28th straight drop, but the decline was the smallest in the last four months.
"A sizable jump in interest rates kept home sales constrained in October and will likely hamper home sales for the remainder of the year," said C.A.R. President Jennifer Branchini. "Despite rates remaining elevated, many other factors have swung in favor of buyers recently including more properties staying on the market longer before selling and fewer homes selling over list price, which could motivate more sellers to offer concessions."
Home prices rose again from the year-ago level for the fourth straight month, as the statewide median price recorded its largest year-over-year gain in 17 months. California's statewide median price dipped 0.4 percent from September's $843,340 to $840,360 in October and rose 5.3 percent from a revised $798,140 recorded a year ago. While October's median price took a step back from the month prior, the month-to-month decline was smaller than the long-run September-to-October price adjustment of -1.5 percent observed in the last 44 years. Prices are expected to level off in the next couple of months, following the traditional seasonal pattern. Positive year-over-year price growth should remain throughout the rest of the year as housing supply is projected to be tight in the coming months.
"With the Federal Reserve pausing rate hikes at the last Federal Open Market Committee meeting and recent economic news pointing to a slowing economy, mortgage rates have been coming down in recent weeks," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "If inflation continues to cool, we could see more improvement in mortgage rates than the Fed is currently projecting for next year, which would alleviate some pressure on both the buy and sell sides of the housing market in 2024."
Key California Housing Market Data Points for October 2023