California Home Sales Hover Below Great Recession Low, Sending Supply of Listings Surging
The number of active listings in California topped 64,900 in April, a post-pandemic high and beating the April 2020 level, according to the Realtor.com® economic research team's monthly housing trends report.
Inventory has been rising across the country, but the gain is more pronounced in California, where the number of active listings was up 50% in April from a year earlier, compared to a 31% rise nationally.
More sellers are entering the market in California, with new listings up 9% in April from a year earlier, similar to the national gain. But the biggest driver of the state's inventory boom is a prolonged, historic slowdown in sales.
Since mid-2023, total sales of single-family homes and condos in California have hovered below the depths reached during the Great Recession in 2008 on a 12-month rolling total basis, according to real estate data provider ATTOM.
Nationally, total home sales, which include new and existing homes, have also been remarkably sluggish for several years—but the national annual sales pace has remained above Great Recession lows.
Sales of existing homes in California remained sluggish in March, falling 2.3% from February, to 277,030, on a seasonally adjusted annualized basis, according to the California Association of Realtors.
'Home sales slowed in March as both buyers and sellers grew more concerned about the ongoing tariff situation and its potential impact on their personal finances,' said CAR President Heather Ozur.
Affordability has been a key factor weighing on buyer demand in California, with median home prices there more than eight times the typical household's annual income, among the highest ratio in the country.
'Home price growth accelerated in California during the early days of the [COVID-19] pandemic, driving the state's median listing price to new heights,' says Realtor.com senior economic research analyst Hannah Jones. 'High home prices and rising mortgage rates put homeownership out of reach for many would-be buyers.'
Despite the tepid pace of sales, home prices in California have remained remarkably firm. Last month, the median list price in the state was $767,000, virtually unchanged from a year ago, according to Realtor.com data.
A supply shortage has helped prop up home prices in California, but as inventory surges in the state, some housing market experts are now watching for those prices to stagnate or even begin to fall.
Last month, Nick Gerli, founder and CEO of real estate data startup Reventure App, told Realtor.com that he is monitoring for weakness in markets that have seen the biggest growth in inventory.
'It's very realistic to expect that, based on the more than 50% year-over-year inventory increase in some of these California markets, we're going to see a big slowing in home price growth over the next 12 months,' Gerli said.
'I wouldn't be surprised if prices trend flat across the state or even slightly negative by the end of the year, and particularly in certain markets,' he added.
As well, a recent report from ATTOM named California as one of the most vulnerable areas for housing market declines, based on gaps in affordability, underwater mortgages, foreclosures, and unemployment.
The report identified 14 California counties as being among the 50 most at-risk in the nation for a housing market downturn.
However, Jones predicts that it will take an even bigger pileup of inventory before home prices begin to decline significantly in California.
'While inventory has recovered somewhat, reaching its highest April level in years last month, for-sale options remain well below 2019 levels,' she says. 'Sale prices are likely to stay near recent highs until inventory builds sufficiently to slow the market, which could eventually prompt sellers to adjust their price expectations.'
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What Retail Investors Need to Know. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
