California’s housing market is showing signs of recovery, as CoreLogic reported that April saw sales of new and existing homes and condos increased 10.7% from March, and the year-over-year decline in transactions was the smallest since last summer.
A total of 38,730 home and condo sales April, which is down 4.6% year-over-year. Sales for the month were the lowest in five years, but was a slight improvement as the 4.6% annual decline was the lowest August 2018.
Home sales declined at all price levels, but the decreases were the largest in the lower price tiers, as sales below $300,000 fell 12.2% year-over-year. Sales over $500,000 dropped 7.4%, and sales more than $500,000 declined 2.8%. Homes selling at more than $1 million dropped 4.5% since April 2018.
“Last year some potential homebuyers got priced out of the market by the double whammy of rising prices and mortgage rates, which meant the mortgage payments they faced had risen significantly more than prices alone and had far outpaced income growth,” the report states. “There was also a psychological shift in 2018 where many home shoppers, facing a thin inventory, became discouraged and simply stepped out of the market, some fearing prices had neared a peak.”
Sales of high-priced homes nationwide have taken a hit so far in 2019, as Redfin reported in May that homes priced at more than $2 million declined 16% year-over-year—the biggest drop in luxury sales since 2010.
The price of homes in the remaining 95% of the market rose 2.7% year-over-year to an average of $300,000 in the first quarter, continuing six straight years of increases.
CoreLogic states that home prices in California saw an increase of 3.5% in April compared to March, with the average sale price coming in at $497,000. The report, however, stated April’s increase was down from the 7.8% increase of April 2018.
The housing market in California’s two largest markets, Los Angeles and San Francisco, saw mixed results in April. A total of 6,987 new and existing homes were sold in the San Francisco area in April 2019, which is a 13.7% increase from March, but a 7.6% decline year-over-year.
Los Angeles reported sales of new and existing homes rose 11.6% in April to 20,074, and down just 3.3% year-over-year. Home sales in April were the lowest for that month since April 2014 when 20,008 homes were sold.