According to the California Association of Realtors, persistently high mortgage rates continue to hobble California's housing market as home sales fell for the fourth consecutive month in September 2023, while the median price rose from the year-ago level for the third straight month to record its largest year-over-year gain in more than a year.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 240,940 in September, 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 September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
September's sales pace was down 5.4 percent on a monthly basis from 254,740 in August and down 21.5 percent from a year ago, when a revised 307,000 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 300,000-unit pace for the 12th month in a row. The monthly decline was the fourth consecutive decrease, and the annual decline was the 27th straight drop.
With the market being less competitive, there are greater opportunities for consumers who need to purchase a home for personal reasons or those who can qualify to purchase at today's interest rates," said C.A.R. President Jennifer Branchini.
"More sellers are making concessions as homes are taking longer to sell, fewer homes are selling above asking price, and there are more homes to choose from."
Home prices rose again from the year-ago level for the third straight month, as the statewide median price recorded its largest year-over-year gain in 15 months. California's statewide median price dipped 1.9 percent from August's revised $859,800 to $843,340 in September and rose 3.2 percent from $817,150 a year ago. While September's median price took a step back from the 15-month high recorded in August, the month-to-month decline was in line with the long-run August-to-September price adjustment of -1.8 percent observed in the last 44 years. Prices are likely to experience monthly declines in the next couple of months, following the traditional seasonal pattern. Positive year-over-year price growth is expected to persist through the remainder of the year as housing supply is expected to remain tight.
"As mortgage rates surge to new highs not seen in more than two decades, home sales are being tested and are likely to remain tepid for the next few months," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "With the Fed planning on holding rates higher for longer, the cost of borrowing will remain elevated and may not come down much in the near term. Housing affordability will continue to hinder sales activity for the rest of the year, especially in the low- and mid-price ranges."
Other key California market highlights include: