Home sales declined in California in
November, suffering from diminishing housing affordability in the face of
rising home prices and interest rates. The
California Association of Realtors (C.A.R.) reported it was the fourth straight
month of declining sales.
Statewide sales of existing,
single-family detached homes were at a seasonally adjusted annualized rate of
387,520 units in November. This was a
3.4 percent decrease from a revised pace of 401,000 units in October and was 12
percent below the November 2012 rate of 440,250 units. C.A.R. said the recent number was the lowest rate
of sales for California since July 2010.
The median price for an existing
single-family home in California also slipped, down 1.2 percent from October's
median price of $427,290 to $422,210.
Still the November price reflects a 22.2 percent run-up in a year. The increase, from a median of $345,560 in
November 2012 represented the 17th month California home prices have
increased by double digits from a year earlier.
"Sales reached their highest level
in the fourth quarter of 2012, when mortgage rates bottomed out last
November. While diminishing housing affordability played a big role in
the larger than expected decrease in home sales this November, exceptionally
strong sales last year was another factor for the double-digit year-to-year
decline," said C.A.R. Vice President and Chief Economist Leslie
Appleton-Young. "The demand for housing could remain soft in the upcoming
months as buyers and sellers continue to search for a level playing field in
"Improving home prices are a
double-edged sword for the housing market. While welcomed news for
homeowners and prospective sellers, diminished affordability is squeezing out
many buyers and dampening their enthusiasm for home purchasing," said 2014
C.A.R. President Kevin Brown. "Buyers are playing the waiting game and putting
their home search on hold until prices stabilize and more inventory becomes
available in the market."
The inventory of available single-family
homes edged up to a 3.6 month supply from 3.4 months in October and 3 months
one year earlier. A six- to seven-month
supply is considered typical in a normal market. Marketing time increased slightly in November
from 33.1 days to 36.7 days, one day less than the previous November.
C.A.R. collects sales and price data
through a survey of 90 member associations throughout the state. Due to the low sales volume in some areas,
median price changes may exhibit unusual fluctuation. C.A.R. cautions that the change in median
prices should not be construed as actual price changes in specific homes.