Based on new data by the California Association of Realtors, closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 313,540 in August 2022.
The statewide annualized sales figure represents what would be the total number of homes sold during 2022 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. August's sales pace was up 6.1 percent on a monthly basis from 295,460 in July and down 24.4 percent from a year ago, when 414,860 homes were sold on an annualized basis. August's monthly sales increase was higher than the long-run average of 0.4 percent for a July-August period in the past 43 years and marked the first monthly sales increase in five months.
"California's housing market stabilized briefly as a temporary reprieve on mortgage rates in July and early August brought buyers into the market," said C.A.R. President Otto Catrina. "Active listings have passed their annual peak, and while homes are taking slightly longer to sell, the share of homes seeing price reductions has also stabilized to near pre-pandemic levels. In fact, price growth in August actually picked up on both a monthly and annual basis, and pending sales suggest a bounce-back for homes priced $2 million and above."
California home prices stabilized in August as the statewide median price increased on both a monthly basis and yearly basis, but at a less-than-2-percent growth pace. The statewide median price edged up 0.7 percent in August to $839,460 from the $833,910 recorded in July and was up 1.4 percent from the $827,940 recorded last August. The year-over-year price gain was the smallest in more than two years. The nominal price increase was attributed partly to a change in the mix of sales in August. With sales in the million-dollar price segment rising 6.8 percent from the prior month, the August statewide median price also pushed up slightly by 0.7 percent from July.
"It's encouraging to see that August's sales pace rebounded above an annualized 300,000 units sold," said C.A.R. Vice President and Chief Economist Jordan Levine. "Although we do not expect a rapid bounce-back because the Fed is expected to continue raising interest rates to get inflation under control, the monthly increase in closed and pending sales suggests that the market may have already priced in most of the rate increases to date. Still, buyers will continue to grapple with rising costs of borrowing, which will keep home sales below the 350,000 annualized pace for the remainder of the year."
Consumer optimism bounced back as interest rates declined in early August, according to C.A.R.'s monthly Consumer Housing Sentiment Index. Conducted in early September, the share of respondents who believed it was a good time to buy a home rose month-over-month for the third straight month to 19 percent, pushing the Housing Sentiment Index to 59, but was significantly lower than the Index of 72 in August 2021. Meanwhile, those who believed it was a good time to sell a home continued to decline to 56 percent, dropping sharply from 72 percent in August 2021. With interest rates moving upward since mid-August, housing sentiment will likely reverse direction next month. In fact, two-thirds (64%) of consumers believed that the overall economic conditions in California would not improve in the next 12 months, and three-quarters (75%) believed that interest rates would rise in the next 12 months.
Other key points from C.A.R.'s August 2022 resale housing report include: