Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 395,550 units in January, according to information collected by the California Association of Realtors from more than 90 local REALTOR associations and MLSs statewide. January’s sales total was down 0.7% from the 398,370 level in December and marked the second straight month that sales fell below the 400,000 benchmark.
Still, sales were up a solid 10.3% from January 2019, largely due to weak sales of a revised 358,540 a year ago.
“The strong sales momentum that we saw in the second half of last year carried over into the new year, thanks to favorable home buying conditions,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR from Bakersfield, Calif. “And while home sales were up double-digits from a year ago, it’s important to remember that current sales are being compared to a market that one year ago was at its lowest level in 10 years as economic uncertainties clouded the market outlook while the government shutdown delayed escrow closings.”
The median price was down 6.5% from December’s revised $614,880 to $575,160 in January, marking the largest drop in the median price in the last seven years. The price decline was largely due to a change in the mix of sales with lower-priced properties making up a bigger share of the market as well as a seasonal slowdown. The median price climbed 7.1% from $536,830 in January 2019. January marked the fourth straight month that the median price registered an annual growth of 6% or higher.
“With interest rates on a declining trend again due to concerns about the impact of the coronavirus, motivated buyers will have an opportunity to stretch their purchasing power in the housing market,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The economic outlook, however, is less clear than a month ago before the outbreak of the disease, and we should expect market uncertainties to continue to linger on for the short term.”
With prices rising faster in recent months as housing inventory continued to shrink, consumer optimism rose both month-over-month and year-over-year for those who believe it is a good time to sell a home. According to a monthly Google poll conducted by C.A.R. in January, nearly two-thirds (62%) say it is a good time to sell, up from 56% a month ago, and up from 50% a year ago. The same motivating factors, however, may have curbed the optimism for home buying as less than one-fourth (23%) of the consumers who responded to the poll believe that now is a good time to buy a home, slightly less than last year (25%), when interest rates were 84 basis points higher.
Other key points from C.A.R.’s January 2020 resale housing report include:
- At the regional level, non-seasonally adjusted sales rose from last year in all major regions, except the Bay Area. Sales in Southern California increased the most at 15.7%, followed by the Central Coast (10.8%) and Central Valley (9.5%). The San Francisco Bay Area was the only region that experienced a sales dip on an annual basis with the declines occurring primarily in the higher-cost areas of the region. Thirty-three of the 51 counties tracked by C.A.R. experienced year-over-year sales growth with San Benito gaining the most from last year at 166.7%.
- At the regional level from a price perspective, median prices in all regions increased in January from a year ago, with Central Coast increasing the most at 11.1%, followed by Central Valley (8.2%), Southern California (7.8%), and the Bay Area (2.0%).
- 39 of the 51 counties tracked by C.A.R. report a year-over-year gain in price in January, with Siskiyou gaining the most at 68.9% from last year. Of the 12 counties that experienced a price drop from last January, Mariposa had the biggest decline of 15.9%, while prices in the remaining counties all declined less than 9.0%.
- The available supply of homes for sale in the state inched up slightly after reaching an 80-month record low in December but continued to drop on a year-over-year basis for the seventh consecutive month. Housing inventory continued to fall by double digits, with active listings declining 26.9% in January after a 25.9% dip in December. The January drop was the largest since April 2013.
- The sizable drop in active listings, together with the surge in sales, resulted in a decline in Unsold Inventory Index (UII) to 3.4 months from 4.6 months a year ago. On a month-to-month basis, supply climbed 1.6% from the prior month but was lower than the average December-to-January increase of 2.8% based on data going back to 2008.
- The median number of days it took to sell a California single-family home fell from a year ago, declining from 38 days in January 2019 to 31 days in January 2020.
- C.A.R.’s statewide sales-price-to-list-price ratio was 98.4% in January 2020, up from 97.3 in January 2019.
- The statewide average price per square foot for an existing single-family home was $275 in January 2020 and $263 in January 2019.
