Year-to-date statewide home sales were down 18.5 percent in October
Based on new data from the California Association of Realtors, the State of California's housing market continued shifting in October 2022 as the monthly average 30-year fixed rate mortgage hovered near 7 percent and led to the lowest sales level since February 2008 and the largest year-over-year decline since December 2007, outside of the pandemic.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 274,040 in October 2022. The statewide annualized sales figure represents what would be the total number of homes sold during 2022 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 down 10.4 percent on a monthly basis from 305,680 in September and down 36.9 percent from a year ago, when 434,170 homes were sold on an annualized basis.
Home sales have been on a downward trend for 16 straight months on a year-over-year basis. It was the third time in the last four months that sales dropped more than 30 percent from the year-ago level. The monthly 10.4 percent sales decline was worse than the long-run average of +0.5 percent change recorded between September and October in the past 43 years. Sales in all price segments continued to drop by 30 percent or more year-over-year, with the $750,000-$999,000 price segment falling the most at 40.8 percent. The high-end market ($1 million-$1,999,000) experienced the smallest sales drop at 34.1 percent.
"While October's sales and price results were weaker than what we've experienced in the past couple of years and could slow further in the upcoming off-season, the market bottom could be in sight," said 2023 C.A.R. President Jennifer Branchini. "Homes are still selling relatively quickly at 23 days on the market, one in four homes is selling above list price due to limited inventory, and with median price growth remaining positive in four of the five price segments, home prices are holding up reasonably well."
California's median home price declined 2.5 percent in October to $801,190 from the $821,680 recorded in September. The October price was 0.3 percent higher than the $798,440 recorded last October and was the smallest year-over-year price gain in 29 months. October marked the fifth consecutive month with a single-digit annual price increase. With the average 30-year fixed mortgage rate expected to remain above 6.5 percent for the rest of the year, home prices will moderate further in the coming months as affordability remains a challenge.
"Excluding the three-month pandemic lockdown period in spring 2020, October's sales level was the lowest since February 2008. With pending sales showing a 50 percent drop from a year ago, we can expect additional tempering in housing demand in the coming months, as we previously forecasted," said C.A.R. Vice President and Chief Economist Jordan Levine. "Home prices will also moderate further over the next several months as interest rates remain elevated in the near term and seasonal factors come into play."
Other key points from C.A.R.'s October 2022 resale housing report include: