Thanks to a short break from rising interest rates, California home sales activity inched up by 1.1 percent in December 2022.
While the slight increase was enough to break the three-month-long downward trend, according to the California Association of Realtors (C.A.R), statewide home sales still remained below 250,000 units for the second month in a row.
Closed sales of existing single-family detached homes in California totaled a seasonally adjusted annualized rate of 240,330 by the end of December – up 1.1 percent from November 2022 and down 44.1 percent from the 429,860 homes sold in 2021.
“It’s encouraging to see an uptick in December’s home sales as buyers took advantage of a slightly more favourable lending environment that provided them with a window of opportunity to enter the California housing market,” Jennifer Brachini, C.A.R president and a Bay Area REALTOR, said.
“As buyers and sellers gradually adapt to the new normal, we are seeing a shift toward a more balanced market,” she said. “With both sides slowly adjusting their expectations, it’s hopeful that we’ll see sales ratcheting higher as market conditions improve further throughout 2023.”
The median price of a home in California continued its downward trend for the fourth month in a row. December’s median home price clocked in at $774,580 – down 0.4 percent from November’s average of $777,500. On a year-over-year basis, median home process were down 2.8 percent from December 2021’s average of $796,570.
“Home prices are holding up relatively well, despite rising interest rates and falling housing demand in recent months,” Jordan Levine, C.A.R. vice president and chief economist, said. “Tight housing inventory was a primary factor preventing prices from free falling as new active listings continued to dip to reach the lowest level in at least the past five years.”
Throughout the entire 2022 year, California’s median home price increased by 4.5 percent, but that number is expected to drop up to 8.8 percent in 2023.
At the regional level, all major regions recorded year-over-year sales drops of over 35 percent. Southern California reported the largest decline of all the regions at -48.3 percent, with the Central Coast following close behind at -45.9 percent.