Existing home sales reach six-month peak
California’s housing market witnessed a rebound in January, as existing home sales reached a six-month peak following a decline in mortgage rates at the close of 2023.
According to the California Association of Realtors (C.A.R.), last month’s closed escrow sales of existing, single-family detached homes stood at a seasonally adjusted annualized rate of 256,160.
This was a 14.4% increase from December’s revised figure of 224,000 homes. It also marked the first year-over-year sales gain in 31 months, despite it being a 5.9% decrease from the previous year’s revised annualized sales of 241,920 homes.
However, even with the uptick, January sales remained below the 300,000-unit threshold for the 16th consecutive month.
In its report, C.A.R. said home sales are expected to remain below this threshold for the first quarter of 2023. Meanwhile, the impact of moderating mortgage rates in late 2023 should continue to make room for modest year-over-year growth in February.
“It’s encouraging to see California’s housing market kick off the year with positive sales growth in January,” said C.A.R. president Melanie Baker. “While we’ll likely experience some ups and downs in home sales in the coming months as rates continue to fluctuate, the lending environment is expected to be more favorable in 2024, so the market should see more pent-up demand translate into sales.”
California home median price falls below $800,000
The report also touched on California’s median home price, which sat at $788,940 in January.
This ended a 10-month streak of prices above $800,000, as the median price dropped 3.8% from December but jumped 5% from the previous year.
C.A.R. attributed the adjustment to seasonal factors and said prices are expected to continue their upward trend with a moderate to single-digit growth rate in the early part of 2024.
“With rates climbing back up to a two-month high earlier this week due to the latest inflation concerns, potential home sellers could hit the pause button on listing their house on the market and wait until rates begin to ease again. In general, rates are expected to decline later this year, and available inventory should slowly improve throughout 2024,” said C.A.R. vice president and chief economist Jordan Levine.
