Home News Is California’s housing market finally cooling off? Here’s the latest data on home sales and prices

Is California’s housing market finally cooling off? Here’s the latest data on home sales and prices

by admin
0 comment

New reports show that the Bay Area and California housing markets may be slowing from the blazing pace set during the pandemic, but prices are higher than ever.

April sales activity in the Bay Area and California is slower than in March and year-over-year, according to three reports from various real estate companies and associations. This may indicate that the market has cooled after reaching its highest levels in the last few decades or more.

Factors driving the trend include rising interest rates and prices that are increasingly out of reach for buyers, the report said.

“The California housing market is slowing from its 12-year high in 2021 as rising mortgage rates and rising house prices are beginning to negatively impact housing demand,” said California’s vice president. Jordan Levine, Chief Economist, said the Real Estate Agents Association stated in the Group’s April 2022 Sales and Prices Report.

The Real Estate Agents Association found that the state-wide sales pace in April, measured by the number of homes sold, was down 1.9% from March and 8.5% from last year. This is the largest year-over-year decrease in the last four months. .. According to the report, Bay Area sales in April slowed further than the state average, down 18.1% from a year ago. Only the Central Coast fell sharply by 21.3% year-on-year.

“April pending home sales have recorded the worst decline in two years, and the affordable challenges facing buyers have been embodied in recent sales trends, with further declines in housing demand. It could continue in the second half of this year, “Levine added.

But at the same time, the report found that prices were higher than ever due to a mix of factors such as low overall home inventories, inflation, and an increased share of luxury homes for sale in the market. Did. This is an expected trend. It will continue for the next few months.

The Real Estate Agents Association found that the median home price in California in April broke the record in March, reaching $ 884,890, 8.7% compared to April last year. That year-over-year increase was the smallest since June 2020, but it still set a new peak price for the state.

According to realtors, sales activity and price changes are subtle and reflect changes in the housing market, but have not collapsed.

“Many real estate experts predict the imminent crash of the Bay Area real estate market, but their dire predictions may be a bit premature,” said Tim Yi, president of real estate firm RE / MAX Gold Bay Area. Said. Report. But he said, “Rising interest rates, unrestrained inflation, and consumer confidence all contribute to the leveling of the Bay Area market, especially the last two weeks of April and the first week of May. It’s remarkable. “

“The housing market is starting to slow down preliminary reactions, but the universal reaction is slowing down,” real estate agent Compass said in a report, as inflation is high and the stock market is declining. Pointed out the account of an open house real estate agent with slower sales activity and less congestion. And there are fewer offers on the new list.

However, the company added that cooling trends tend to be slower unless there is an economic disaster such as the 2008 crash. “There are more slow leaks in overpressured tires than flat tires at high speeds.”

“Even the hottest markets will eventually be cool. This doesn’t necessarily mean a big’bubble and crash’,” the report said. “In the last 40 years, a cooling shift usually meant a gradual decline in sales activity, followed by either a flat rise or a 5% to 10% price decline.”

The compass also noted that after a monthly surge since December 2021, the number of lists that accept offers and sign contracts in April has declined slightly to “atypical.”

According to the National Association of Real Estate Agents, local and state trends reflect trends in the national housing market, with national sales activity declining year-on-year.

Things may be slowing, but reports show that the market is still very competitive and the problem of affordable housing is likely to continue across the state.

“Purchase urgency keeps the market competitive, especially as home inventories are well below pre-pandemic levels as interest rates continue to rise,” said California Real Estate Agents Chairman and Chairman. Bay Area real estate broker Otto Katrina said: Group report.

“In the home buying season, more lists may be on the market, but in major metropolitan areas such as the Bay Area and Southern California, housing shortage problems can continue throughout the year. “Region,” added Katrina.

Danielle Echeverria is a staff writer for the San Francisco Chronicle. Email: [email protected] twitter: @DanielleEchev

You may also like