Real Estate Business
Home Sales Dip 34 Percent Annually in March
According to the California Association of Realtors, the pace of home sales in California in March 2023 decreased monthly by 1% from 284,010 in February 2023 but decreased annually by 34.2 % from last year, when a revised 427,040 homes were sold. Californian sales of previously owned single-family homes dropped short of 300,000 units for the sixth consecutive month.
A seasonally adjusted yearly rate of 281,050 existing single-family detached homes were sold in closed escrow in California in March 2023. The total number of homes sold in 2023, if sales kept up their pace from March, is shown in the state’s annual home sales statistic. Additionally, seasonal factors that affect home sales have been taken into account in the update.
Despite a drop in March house sales, the housing market remains competitive, with homes selling faster and the sales-to-list-price ratio rising, all while the total number of homes on the market for sale continues to drop. All indications point to a market with strong demand, which should help boost sales during the spring buying season.”
In March, California’s median home price increased for the first time in seven months, up 7.6 percent from $735,480 in February to $791,490. However, the price in March was also lower year over year for the fifth straight month, falling 7.0 percent from the revised $851,130 recorded last March. With home prices rising more steeply than in previous years, the market may witness higher year-over-year price decreases as it enters the spring homebuyinghomebuying season.
March 2023 Key Housing Statistics
Except for the Central Valley (-27.7 percent), all regions continued to experience annual home sales decreases of more than 30 percent, with the Far North experiencing the greatest drop at -38.9 percent. Sales in four of the region’s six counties fell more than 40% year on year. The San Francisco Bay Area trailed closely behind with a 35.5 percent drop in sales from a year earlier, while Southern California (-33.8 percent) and the Central Coast (-31.2 percent) both experienced significant drops from last March.
In March, all but one of the 51 counties examined by C.A.R. saw a reduction in home sales from the previous year, with 35 counties falling more than 30% year on year and five counties falling more than 50% year on year. Extreme weather conditions across the state have negatively influenced the housing market in recent weeks, contributing to dramatic sales decreases in some of these counties. Plumas experienced the highest reduction in sales in March (-77.3 percent), followed by Mono (-70.6 percent) and Glenn (-52.9 percent). Amador was the only county to have an increase in annual home sales, with a 6.4 percent increase year over year. However, the market is picking up steam as the spring homebuyinghomebuying season approaches. Except for one county, all but one saw a month-over-month increase in sales, while home sales in 23 counties increased by more than 50% from February.
Home sales dropped in other countries
In March, prices fell year over year in more than four out of five counties, with 18 counties decreasing more than 10%. Santa Barbara County experienced the greatest dip (-40.8%), followed by Mono (-31.8%) and Tehama (-29.5%). Conversely, six counties saw an increase in median prices from March of last year, with all but one seeing an increase of less than 10%. Glenn had the highest price rise of any county, at 15.6 percent, followed by Kings (9.2 percent) and Humboldt (4.7 percent).
Housing inventory in California fell every month for the second month, from 3.2 months in February to 2.2 months in March, the lowest level since May 2022. The unsold inventory index (U.I.I.) in March 2023 increased over the previous year, rising 37.5 percent yearly. The increase in U.I.I. was mostly attributable to low housing demand since existing home sales remained below the yearly 300,000 thresholds.
All price categories had a 28 percent or greater increase in U.I.I. from a year ago, with the $1 million and over price range gaining the most (50 percent), followed by the $500,000 – $749,000 price range (25.0 percent), the $750,000 – $999,000 price range (23.5 %), and the below $500,000 (16.7%).
With sales remaining at least 30 percent below last year’s level in more than half of California’s counties, active listings increased year over year in March. In March, twenty-one counties increased by double digits year on year, compared to 43 counties in February. Marin had the highest annual growth rate (52.5 percent), followed by Kings (50.7 percent) and Riverside (46.3 percent). Meanwhile, 20 counties had a drop in active listings from the previous year, as home sales growth exceeded the increase in new active listings in several counties. In March, Mono experienced the greatest year-over-year reduction (52.9 percent), followed by Alameda (-45.3 percent) and Contra Costa (-43.2 percent).
Despite increasing total active listings in March, home inventory is substantially tighter than the yearly gain indicates. While the number of new active listings added in March increased 27.9 percent from the previous month, it also decreased 30 percent year over year from the same month in 2022. The decline in new active listings was the greatest since the pandemic shutdown in May 2020.
The median number of days it took to sell a single-family home in California was 19 and 8 in March 2022.
In March 2023, C.A.R.’s statewide sales-price-to-list-price ratio was 99.1 percent, up from 103.9 percent in March 2022.
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The average statewide price per square foot for an existing single-family house was $388 in March of this year, down from $418 in March of last year.
According to Freddie Mac, the 30-year fixed-mortgage interest rate averaged 6.54 percent in March, up from 4.17 percent in March 2022.
Reference: California home sales volume