Home sales in California fell 13% year-over-year in March, and were the lowest for that month in five years, according to a report by CoreLogic.
The average price for a home in March increased just 0.6% from last year, which is the lowest annual gain in seven years. Southern California and the San Francisco area reported small declines in their region-wide averages—the first decline in seven years.
CoreLogic reported an estimated 34,926 home sales occurred in March, which is the lowest number since 2008 when that number fell below 30,000.
The six-county Southern California region recorded a 14.1% decrease in new and existing home sales in March and posted its first decline in the average home sale price since March 2012, as the media sale prices dropped to $518,500.
“The housing market has already showed signs of slowing down, especially when it comes to homebuying. This is happening in Orange County and across the Southern California region as homebuying has experienced a year-long cool down and buyers have begun to gain leverage,” Paulina Torres, Research Analyst at JLL, said in an interview with GlobeSt.com. “Housing completions for both single and multi-family have increased for all Southern California counties except for Orange County, where single-family completions have increased but multi-family completions have decreased. This is partially due to the heavy increases in multi-family construction, concentrated in Irvine Business Complex, beginning in 2013 that are finally cooling down.”
Similar drops were reported in the San Francisco Bay area, as just 6,124 new and existing home sales occurred in March, resulting in a 14.8% decline year-over-year.
All price points saw a decline in the latest report. Home deals below $500,000 fell 13.7% from last year, sales of more than $500,000 declined 13.2% and $1 million-plus deals dropped 17.8%.
Sales of $2 million-plus home saw a decline of 20.6% from last year.
“Starting in late spring 2018, some potential homebuyers got priced out of the market by the double whammy of rising prices and mortgage rates, while others simply stepped out of the market amid concerns prices were near a peak,” the report stated. “The sales trends for April and May this year will likely begin to clarify whether many of those who put plans on hold in 2018 are being lured back into the market by this year’s lower mortgage rates, higher inventory and the resulting improvement in buyers’ negotiating position.”
It wasn’t all bad news in the report, as the average price paid for all new and existing homes in California rose 2.8% from February to $483,000, which is a slight increase of 0.6% from March 2018.
The report added the increase in the median price paid is typical for this time of the year, as the median price has increased by an average of 3.8% during February and March.
Inland counties saw annual gains in March with Butte County posting a 35.4% increase and Shasta County recording an 8.7% increase.