CALIFORNIA HOME SALES REACH 5-MONTH HIGH AS MORTGAGE RATES HIT LOWS

Home sales were lower in San Diego County, as well as in California, in August 2024 as buyers held out and adopted a “wait-and-see” approach, despite interest rates at the lowest level since spring, according to the latest home sales and price report from the California Association of Realtors (C.A.R.).

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 262,050 in August 2024, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2024 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

Statewide, the August 2024 sales pace fell 6.3%, compared to the 279,810 homes sold in July 2024. Home sales were up 2.8% from a year ago in August 2023, when a revised 254,820 homes were sold on an annualized basis. The sales pace has remained below the 300,000-threshold for 23 consecutive months.

Year-to-date statewide home sales through August 2024 edged up 0.5%, compared to the same period last year.

In San Diego County, the sales pace for home sales decreased by 4.7% in August 2024 from July 2024. Year-over-year sales between August 2024 and August 2023 were 3.2% higher.

“Home price growth in California continued to moderate in August as the market neared the end of the traditional home buying season,” said C.A.R. President Melanie Barker, a Yosemite REALTOR®. “With the Federal Reserve signaling it will lower interest rates soon, mortgage rates are expected to ease well below their recent peaks. As such, housing affordability will improve in the fall, and buyers will benefit from lower costs of borrowing in the coming months.”

Regarding home prices, the statewide median price was essentially flat, inching up 0.2% from $886,560 in July 2024 to $888,740 in August 2024. California’s median home price was 3.4% higher than the revised $859,670 recorded in August 2023. The year-over-year gain was the 14th straight month of annual price increases, albeit the smallest since September 2023. 

August 2024 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Home prices could soften further in the coming months but should continue to register year-over-year growth for the rest of the year.

Sales in higher-priced market segments continued to influence the mix of sales, but the impact on the state-wide median price growth has been reduced in recent months. While the sales pace for the $1 million-and-higher price segment decelerated in August to 3.6%, sales in the sub-$500,000 market also had a lackluster performance, dropping 9.0% below the year-ago level. Moderation in the median price growth could be observed in the coming months if the share of homes priced at or above $1 million continues to shrink in the fall.

In San Diego County, the average price for an existing, single-family detached home exceeded $1 million in August 2024. It was the sixth consecutive month the median price has remained at more than $1 million.

The median sales price in San Diego for August 2024 was $1,010,000, a 1.0% decrease from the $1,020,000 posted in July 2024. A year ago, in August 2023, the median price for a San Diego home was $1 million.

“Despite a slightly better lending environment in recent weeks, closed home sales pulled back in August as buyers evaluated whether to wait for the Federal Reserve to cut rates before entering the market,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “Pending sales, along with mortgage application trends, however, suggest that housing demand has been slowly improving in the past few weeks. If mortgage rates remain at their current low or dip further in the coming weeks, home sales should rise steadily as we move toward the end of the year.”

Other key points from C.A.R.’s August 2024 resale housing report include:

• At the regional level, home sales in Southern California fell 2.3% when compared to last year’s sales level.
  
  
• At the regional level, median home prices experienced a 4% increase in August 2024, compared to August 2023.
  
  
• Home prices continued to grow on a year-over-year basis throughout the state, with median sales prices in 36 counties registering price increases in August 2024, compared to median sales prices a year ago in August 2023.
  
  
• The statewide unsold inventory index, which measures the number of months needed to sell the supply of homes on the market at the current sales rate, increased both month-over-month and year-over-year. The index was 3.2 months in August, up from 2.9 months in July and up from 2.4 months in August 2023.

August 2024 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

• The unsold inventory index of available existing homes for sale in San Diego County was at 2.8 months in August 2024, compared to 2.6 months in July 2024, 2.7 months in June 2024 and 1.9 months in August 2023. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate.
  
  
• Active listings at the state level rose more than 39% from the year-ago level. It was the seventh straight month of annual gains in for-sale properties.
  
  
• New active listings at the state level improved from a year ago for the eighth consecutive month in August 2024. Despite a decelerating growth rate in August, the increase in new listings at the tail end of the buying season is an encouraging sign that supply conditions in California will continue to improve in the coming months. 
  
  
• The median number of days it took to sell a California single-family home was 22 days in August, up from a revised 17.5 days in August 2023.
  
  
• In San Diego, the median number of days it took to sell an existing, single-family home was 17 days in August 2024, compared to 16 days in July 2024, 14 days in June 2024 and 13 days in August 2023. For previous 2024 months, the figures were 12 days in May, April and March. The median represents the time when half the homes sell above it and half below it.
  
  
• C.A.R.’s statewide sales price-to-list-price ratio was 100% in August 2024 and 100% in August 2023. Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its original list price and is expressed as a percentage. A sales-to-list ratio with 100% or above suggests that the property sold for more than the list price, and a ratio below 100% indicates that the price sold below the asking price.
  
  
• The statewide median price per square foot for an existing single-family home was $427, up from $416 in August a year ago.
  
  
• The 30-year, fixed-mortgage interest rate averaged 6.50% in August, down from 7.07% in August 2023, according to C.A.R.’s calculations based on Freddie Mac’s weekly mortgage survey data.