Home sales in California have reached its lowest level in 16 years, according to the latest report from the California Association of Realtors.
The news comes a month after another CAR report showed that only 15% of Californians could afford a home.
The latest figures show that home sales during November were down 7.4% compared to October and down by 5.8% compared to November 2022. The decline is the 29th straight drop in home sales statewide but the smallest decrease in over a year, the report said.
“Elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November,” CAR President Melanie Barker said in a statement.
“With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could reenter the market early next year.”
The median cost of a single-family home in California decreased by 2.2% and now stands at $822,200 but is still 6.2% higher than it was a year ago.
“While sales have been weak for the past several months, a tight supply of homes for sale is keeping home prices from falling,” CAR senior vice president and chief economist Jordan Levine said in a statement.
“Going into 2024, the recent decline in mortgage rates, along with the upward momentum in home prices, could motivate more would-be sellers to list their homes for sale in the spring homebuying season.”
When looking at the 34 counties in California that the organization tracks, 23 saw a more than 10% year-over-year decrease in home sales. In Northern California, Calaveras County had the biggest decline at 33.3%, followed by Butte and Mendocino counties.
At the regional level, sales in all of California’s major regions dropped in November on a year-over-year basis. The Central Valley had the biggest decrease, followed by the Central Coast.
The San Francisco Bay Area, Southern California and the Far North region also experienced a drop in sales.
Other areas, like San Benito, Mono and Lassen, saw increased home sales.
The full report can be viewed here.