Persistently high mortgage rates are causing fewer home sales and lower home selling prices in the California housing market, according to the latest home sales and price report from the California Association of Realtors (C.A.R.). 

In San Diego, sales of existing, single-family homes in September 2023 declined 19.4 percent in a month-over-month comparison with August 2023, while the decline was 25.3 percent in a year-over-year comparison with September 2022.

Statewide, the sales pace for existing, single-family homes in September 2023 was down 5.4 percent with 254,740 units sold in August 2023, and down 21.5 percent compared to September 2022, when 307,000 homes were sold on an annualized basis. Statewide year-to-date home sales were down 28.5 percent in September 2023.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 240,940 in September, 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 2023 if sales maintained the September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

Sales of existing single-family homes in California remained below the 300,000-unit pace for the 12th month in a row. It was the fourth consecutive month for lower statewide home sales and the 27th straight drop in annual comparisons.

Year-to-date statewide home sales were down 28.5 percent in September.

Meanwhile, the median sales price for an existing, single-family detached home in San Diego County in September 2023 dipped by 2.7 percent to $973,100 from the $1 million mark posted in August 2023. A year ago, in September 2022, the median price for San Diego was $899,000, a year-over-year difference of 8.2 percent.

September 2023 County Sales and Price Activity

(Regional and condo sales data not seasonally adjusted)

Statewide, in September 2023, the median price was $843,340, which was 2.7 percent lower than the August 2023 figure of $859,800, and 3.2 percent lower than the September 2022 figure of $817,150. The median represents a price where half of the total number of homes sold above it and half below.

While September’s median price took a step back from the 15-month high recorded in August, the month-to-month decline was in line with the long-run August-to-September price adjustment of -1.8 percent observed in the last 44 years. Prices are likely to experience monthly declines in the next couple of months, following the traditional seasonal pattern. Positive year-over-year price growth is expected to persist through the remainder of the year as housing supply is expected to remain tight.

“With the market being less competitive, there are greater opportunities for consumers who need to purchase a home for personal reasons or those who can qualify to purchase at today’s interest rates,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “More sellers are making concessions as homes are taking longer to sell, fewer homes are selling above asking price, and there are more homes to choose from.”

“As mortgage rates surge to new highs not seen in more than two decades, home sales are being tested and are likely to remain tepid for the next few months,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “With the Fed planning on holding rates higher for longer, the cost of borrowing will remain elevated and may not come down much in the near term. Housing affordability will continue to hinder sales activity for the rest of the year, especially in the low- and mid-price ranges.”

Other key points from C.A.R.’s September 2023 resale housing report include:

•  At the regional level for Southern California, year-over-year sales declined in September 2023 by 21.7 percent. In August 2023, the figure was 13.9 percent.
  
  
• At the regional level for Southern California, median home prices in September increased from a year ago by 4.7 percent. In August, the figure was 4.4 percent.
  
  
• Housing supply in California continued to shrink from a year ago in September as mortgage rates remained elevated. 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, was 2.8 in September 2023. It increased 16.7 percent on a month-over-month basis and was unchanged from a year ago in September 2022.

September 2023 County Unsold Inventory and Days on Market

(Regional and condo sales data not seasonally adjusted)

• In San Diego in September 2023, the inventory of available homes for sale was 2.5 months, compared to 1.9 months in August, 2.0 months in July 2023 and 2.5 months in August 2022. Other unsold inventory figures in 2023 in San Diego included 2.0 months in June, 1.7 months in May, 1.9 months in April, 1.7 months in March, 2.3 months in February and 2.7 months in January. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell-out given the current rate of sales.
  
  
•  Active listings at the state level continued to dip on a year-over year basis for five straight months, with the decline in each of the last six months all registering more than 20 percent year-over-year. With rates remaining high and the market transitioning to the low season, active listings will not likely improve much, if at all, before the end of the year.
  
  
• The median number of days it took to sell a California single-family home was 18 days in September and 27 days in September 2022.
  
  
•  In San Diego, the median number of days it took to sell an existing, single-family home was 14 days in September, compared to 13 days in August 2023, 12 days in July 2023 and 18 days in August 2022. Other median-time-on-the-market figures for San Diego in 2023 include 11 days in June, 12 days in May and April, 15 days in March, 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.
  
  
• The statewide, sales-price-to-list-price ratio on a monthly basis in 2023 was at 100 percent in September, August, July, June, May and April, 99.1 percent in March, 97.7 percent in February and 96.5 percent in January. A year ago, in September 2022, the ratio was 97.6 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
  
  
• The 30-year, fixed-mortgage interest rate averaged 7.20 percent in September, up from 6.11 percent in September 2022, according to C.A.R.’s calculations based on Freddie Mac’s weekly mortgage survey data.

The median sales price for an existing single-family home in San Diego hit the $1 million mark in August 2023, according to the latest home sales and price report from the California Association of Realtors (C.A.R.). 

August 2023’s median price was a 3.2 percent increase from $969,020 figure for the previous month of July 2023. A year ago, in August 2022, the median price figure was $886,250, a year-over-year difference of 12.8 percent.

August 2023 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Statewide, in August 2023, the median price reached $859,800, its highest level in 15 months. The statewide median price reached its peak of $893,200 in May 2022.

The August 2023 median price for the state also was the largest year-over-year gain in 14 months. In July 2023, the median price for California was $832,400, a difference of 3.5 percent with August 2023. A year ago, in August 2022, the California median price was $834,740, a 3.0 percent difference with August 2023.

Meanwhile, as home prices hit high levels, home sales in California declined for the third straight month in August 2023.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 254,740 in August, 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 2023 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The sales pace in August 2023 was down 5.3 percent on a monthly basis from a revised 268,940 in July 2023 and down 18.9 percent from a year ago in August 2022, when a revised 314,270 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 300,000-unit pace for the 11th month in a row. The sales pace decline on an annual basis was the 26th straight drop.

Rising mortgage rates and an ongoing shortage of homes for sale continued to hamper the California housing market resulting in a 29.2 percent decline in year-to-date statewide home sales from January to August 2023.

Meanwhile, the sales pace for existing, single-family detached homes in San Diego in August 2023 was 2.7 higher when compared with July 2023. However, August 2023 home sales were down 16.0 percent in a year-over-year comparison with August 2022.

“Despite persistently high mortgage rates and availability of homes remaining extremely tight, there’s still solid interest from prospective buyers,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “The highly competitive housing market continued to provide support to home prices, with the statewide median price steadily improving since early 2023. As California housing prices continue to stabilize, buyers and sellers on the sidelines will get back into the market once interest rates begin to moderate in the fourth quarter.”

“A reacceleration of interest rates since April, combined with tight housing inventory pushed down California home sales to a seven-month low in August,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “While rates may remain elevated for a little longer, macroeconomic fundamentals are expected to soften starting in the last quarter of this year. Mortgage rates should begin to ease, albeit gradually, in the next couple months, and provide a much-needed boost to both the supply and the demand sides of the housing market.”

Other key points from C.A.R.’s August 2023 resale housing report include:

• At the regional level for Southern California, year-over-year sales declined in August 2023 by 13.9 percent. In July 2023, the figure was 14 percent.
  
  
• At the regional level for Southern California, median home prices in August 2023 increased from a year ago by 4.4 percent. In July 2023, the figure was 2.7 percent.
  
  
• Home prices continued to stabilize across the state, with 19 counties experiencing year-over-year median price decreases in August, compared to 27 counties in July and 37 in June.
  
  
• Housing supply in California continued to shrink from a year ago in August as mortgage rates remained elevated. 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, was at 2.4 months in August 2023, 2.5 months in July 2023 and 2.8 months in August 2022. The statewide unsold inventory index was down 14.3 percent on a year-over-year basis.

August 2023 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

• In San Diego in August 2023, the inventory of available homes for sale was 1.9 months, compared to 2.0 months in July 2023 and 2.5 months in August 2022. Other unsold inventory figures in 2023 in San Diego included 2.0 months in June, 1.7 months in May, 1.9 months in April, 1.7 months in March, 2.3 months in February and 2.7 months in January. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell-out given the current rate of sales.
  
  
• Active listings at the state level have fallen for five months in a row in a year-over-year comparison. The year-over-year decline has exceeded 20 percent the past four months.
  
  
• Active listings in a month-over-month comparison improved slightly from July 2023 to August 2023 as fewer listings were taken off the market due to the slowdown in closed sales in August.
• The median number of days it took to sell a California single-family home was 18 days in August 2023, 16 days in July 2023 and 23 days in August 2022.
  
  
• In San Diego, the median number of days it took to sell an existing, single-family home was 13 days in August 2023, compared to 12 days in July 2023 and 18 days in August 2022. Other median-time-on-the-market figures for San Diego in 2023 include 11 days in June, 12 days in May and April, 15 days in March, 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.
  
  
• The statewide, sales-price-to-list-price ratio on a monthly basis in 2023 was at 100 percent in August, July, June, May and April, 99.1 percent in March, 97.7 percent in February and 96.5 percent in January. A year ago, in August 2022, the ratio was 98.4 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
  
  
• The 30-year, fixed-mortgage interest rate averaged 7.07 percent in August, up from 5.22 percent in August 2022, according to C.A.R.’s calculations based on Freddie Mac’s weekly mortgage survey data.

Interest rates are still on the rise, along with the price of homes in San Diego County and statewide, according to the latest home sales and price report for July 2023 from the California Association of REALTORS® (C.A.R.).

In San Diego, the median sales price for an existing, single-family detached home in July 2023 increased to $969,020, an increase of 1.1 percent from June 2023’s median price of $958,250. In a year-over-year comparison with July 2022, the median price was $930,000, an increase of 4.2 percent.

Statewide, the median home price exceeded $800,000 in July 2023 for the fourth straight month. It was the first year-over-year gain since October 2022, nine months ago.

July 2023 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

The statewide median home price dipped 0.7 percent from June 2023’s $838,260 to $832,345 in July 2023, and it was up 0.2 percent from a revised $830,870 a year ago in July 2022.

As the housing market transitions into the off-peak homebuying season in the coming months, the statewide median price will likely soften as market competition cools. Home prices, nevertheless, should continue to improve from last year as tight housing supply conditions persist.

Meanwhile, higher interest rates are reducing the number of home sales. Year-to-date statewide home sales were down 30.3 percent in July 2023.

Sales of existing, single-family homes in San Diego in July 2023 declined by 1.3 percent in a month-over-month comparison with June 2023, while the figures was 4.9 percent lower in a year-over-year comparison with June 2022.

Statewide, the sales pace for existing, single-family homes in July 2023 was down 3.0 percent, compared to June 2023, and down by 9 percent from a year ago in July 2022.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 269,180 in July 2023, 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 2023 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

July 2023’s sales pace was down on a monthly basis from 277,490 in June 2023, and down 9.0 percent from a year ago in June 2022, when a revised 295,770 homes were sold on an annualized basis.

Sales of existing single-family homes in California remained below the 300,000-unit pace for the 10th consecutive month. The yearly drop was the smallest since April 2022 and marked the first time in more than a year that sales dropped by less than 10 percent from the previous year. However, the small decline was due partly to a lower sales base last July, when sales dropped below 300,000 for the first time in over two years.

“Despite slowing home sales in the past couple of months, housing demand remains resilient, and the market continues to be competitive,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “Many in the market aspire to become homeowners and are actively looking to buy, but the shortage of homes for sale and elevated mortgage rates remain challenging headwinds for them.”

“Housing supply continued to be tight in California as rates remain well above levels observed in 2020-2021, when homeowners locked in their long-term mortgages,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “While home sales have been negatively impacted by the shortage of homes for sale during this year’s homebuying season, home prices continue to stabilize and have provided consumers with some confidence that market conditions are still solid. Interest rates should moderate later this year if inflation eases further, and home sales could see some improvement in the winter season.”

Other key points from C.A.R.’s July 2023 resale housing report include:

• At the regional level for Southern California, year-over-year sales declined in July 2023 by 14 percent.
  
  
• At the regional level for Southern California, median home prices in July 2023 increased from a year ago by 2.7 percent.
  
  
• Home prices across the state stabilized somewhat in July 2023, as fewer counties (27) posting year-over-year median price declines in July 2023, compared with 37 counties in June 2022.
  
  
• Housing inventory in California climbed month-over-month in July for the second straight month after inching up in June but continued to trail last year’s level as a lack of new listings remained the norm.
  
  
• The statewide unsold inventory in July 2023 increased 13.4 percent compared to June 2023, but dropped sharply by 19.4 percent on a year-over-year comparison with June 2022.
  
  July 2023 County Unsold Inventory and Days on Market
  (Regional and condo sales data not seasonally adjusted)
  
  
  
• Active listings at the state level in July 2023 fell more than 30 percent from a year ago in July 2022. It was the largest annual decline since May 2021.
  
  
• With mortgage rates expected to remain high in August and September, the “lock-in effect” may prevent any meaningful improvement in supply conditions for the remainder of the third quarter, as homeowners are reluctant to sell their homes and buy something new due to the financial shock of trading their historically low mortgage rates for a higher interest rate with their new property.
  
  
• Unsold inventory declined in all price ranges in July 2023 in year-over-year comparisons from a year ago in July 2022. The mid-price segment of $750,000-$999,000 dipped the most by 25.8 percent in a year-over-year comparison. The $500,000-$749,000 price range, with a decrease of 20 percent, posted the second largest decline from last year, followed by the sub-$500,000 at 18.8 percent lower and the $1 million price segment at 16.1 percent lower.
  
  
• Statewide unsold inventory on a monthly basis was at 2.5 months in July 2023, compared to 2.2 months in June 2023 and 3.1 months in July 2022.
  
  
• In San Diego in July 2023, the inventory of available homes for sale was 2.0 months, which was the same figure for June 2023. In July 2022, the figure was 3.1 months. Other unsold inventory figures in 2023 in San Diego included 1.7 months in May, 1.9 months in April, 1.7 months in March, 2.3 months in February and 2.7 months in January. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell-out given the current rate of sales.
  
  
• Statewide, the median number of days it took to sell a California single-family home was 16 days in July 2023, compared to 15 days in June 2023, 17 days in May 2023, 20 days in April 2023 and 18 days a year ago in July 2022.
  
  
• In San Diego, the median number of days it took to sell an existing, single-family home was 12 days in July 2023, compared to 11 days in June 2023, 12 days in May 2023 and a revised 13.5 days a year ago in July 2022. Other median-time-on-the-market figures for San Diego in 2023 include 12 days in April, 15 days in March, 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.
  
  
• The statewide, sales-price-to-list-price ratio this year was at 100 percent in July and June, May and April, 99.1 percent in March, 97.7 percent in February and 96.5 percent in January. A year ago, in July 2022, the ratio was 100.0 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
  
  
• The 30-year, fixed-mortgage interest rate averaged 6.84 percent in July 2023, up from 5.41 percent in July 2022, according to C.A.R.’s calculations based on Freddie Mac’s weekly mortgage survey data.

Elevated interest rates and a shortage of homes for sale continued to dictate the California housing market in June 2023, with the year-over-year price decline at its lowest rate this year, according to the latest home sales and price report from the California Association of REALTORS® (C.A.R.).

For June 2023, in San Diego, home sales were lower and home prices were higher in month-over-month comparisons between June 2023 and May 2023.

Sales of existing, single-family homes in San Diego County in June 2023 declined by 6.6 percent in a month-over-month comparison with May 2023, while the figure was 24.3 percent lower in a year-over-year comparison with June 2022.

Meanwhile, the median sales price for an existing, single-family detached home in San Diego County increased in June 2023 to $958,250, compared to $935,000 in May 2023, a 2.5 percent difference. In a year-over-year comparison, the median price was $950,000 in June 2022, a 0.9 percent difference.

June 2023 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Statewide, the sales pace for existing, single-family homes in June 2023 was down by 4.1 percent, compared to May 2023, when 289,460 homes were sold, and it was down by 19.7 percent from June 2022, when a revised 345,760 homes were sold on an annualized basis.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 277,490 in June, 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 2023 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

Sales of existing single-family homes in California remained below the 300,000-unit pace for the ninth consecutive month. The yearly drop was the smallest since May 2022 and marked the first time in a year that sales dropped by less than 20 percent from a year ago.

However, the smaller decline was due primarily to weaker sales last June, when sales dropped below 350,000 for the first time in two years.

Year-to-date statewide home sales were down 32.9 percent in June 2023.

California’s median home price exceeded $800,000 in June for the third straight month, edging up 0.3 percent from $836,110 in May 2023 to $838,260 in June 2023. The statewide median price continued to rise and reached the highest level in 10 months. The tight housing supply and more high-end homes being sold relative to prior months continued to put upward pressure on prices.

Despite the improvement from early 2023, the median home price in California in June 2023 dipped 2.4 percent on a year-over-year basis for the eighth consecutive month from $858,800 in June 2022.

While the downward movement in home prices appears to indicate that housing values are stabilizing, more dips in the median price are expected in the coming months as rates will likely remain elevated for most, if not the entire third quarter of 2023. Higher home prices are a warning signal that housing affordability could remain low in the second half of the year.

“California’s housing market has improved since the winter and appears to have found its footing as sales declined at the slowest pace in over a year,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “Despite elevated interest rates, the demand for housing continues to outpace the availability of homes for sale, as buyers slowly adapt to the new normal under the current housing market conditions.”

“Buyer demand appears to have stabilized after rates doubled last year, though rates could still move higher in the coming months,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “As inflation finally subsides later this year, the market could see some improvement as rates and supply conditions start turning around.”

Other key points from C.A.R.’s June 2023 resale housing report include:

• At the regional level, year-over-year sales declined in June 2023 in the Southern California region by 19.4 percent.
  
  
• At the regional level, median home prices in June 2023 dropped from a year ago in the Southern California region by 1.8 percent.
  
  
• Housing inventory in California inched up in June 2023, compared to May 2023, but it was lower than in June 2022, as tight housing supply continues to be the norm. With mortgage rates expected to be high in the next couple of months, California may not see any meaningful improvement in its housing inventory throughout the third quarter.
  
  
• The statewide unsold inventory in June 2023 increased 4.8 percent, compared to May 2023, but dropped 8.3 percent from a year ago in June 2022.
  
  
• Active listings statewide for June 2023 fell sharply by 34 percent, compared to June 2022. It was the largest year-over-year decline since May 2021.
  
  
• Unsold inventory in June 2023 declined in several price ranges from a year ago in June 2022. The mid-price segment of $750,000-$999,000 recorded the biggest year-over-year decline in unsold inventory of 16 percent, followed by the $500,000-$749,000 price range (-12.5 percent) and the sub-$500,000 (-11.5 percent). Unsold inventory in June 2023 for homes priced at $1 million and higher was unchanged in month-over-month and year-over-year comparisons.
  
  

June 2023 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

• Statewide unsold inventory on a monthly basis increased to 2.2 months, compared to 2.1 months for May 2023 and 2.4 months for May 2022.
  
  
• In San Diego, in June 2023, the inventory of available homes for sale was 2.0 months, compared to 1.7 months for May 2023 and 2.4 months for May 2022. Other unsold inventory figures in 2023 in San Diego included 1.7 months in May, 1.9 months in April, 1.7 months in March, 2.3 months in February and 2.7 months in January. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell-out given the current rate of sales.
  
  
• Statewide, the median number of days it took to sell a California single-family home was 15 days in June 2023, compared to 17 days in May 2023, 20 days in April 2023 and 14 days a year ago in June 2022.
  
  
• In San Diego, the median number of days it took to sell an existing, single-family home was 11 days in June 2023, compared to 12 days in May 2023 and 11 days in June 2022. Other median-time-on-the-market figures in San Diego in 2023 include 12 days in May and April, 15 days in March, 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.
  
  
• The statewide, sales-price-to-list-price ratio was at 100 percent in June, May and April 2023, 99.1 percent in March 2023, 97.7 percent in February 2023 and 96.5 percent in January 2023. A year ago, in June 2022, the ratio was 101.3 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
  
  
• The 30-year, fixed-mortgage interest rate averaged 6.71 percent in June, up from 5.52 percent in June 2022, according to Freddie Mac.

The newest member of the PSAR Government Affairs Committee has been an elected official for the past 22 years.

Candidate for Secretary / Treasurer (1 Seat)

Sam Calvano

Candidates for Director Pick Up to Five (Two-Year Seats)

Tristin Stokes	Monica Greenwood	Charmaine Orcino - Gonzales
Paula Gonzalez	Jim O'Donnell	Norma Scantlin
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A reprieve in mortgage interest rates helped the California housing market rebound in May 2023 with homes sales at an eight-month high, according to the latest home sales and price report from the California Association of REALTORS® (C.A.R.).

In San Diego during May 2023, both home sales and home prices were higher in month-over-month comparisons with April 2023.

Sales of existing, single-family homes in San Diego County increased in May 2023 by 14.8 percent in a month-over-month comparison with April 2023, but the figure was 24.1 percent lower in a year-over-year comparison with May 2022.

Meanwhile, the median sales price for an existing, single-family detached home in San Diego County increased in May 2023 to $935,000, compared to $930,000 in April 2023, a 0.5 percent difference. In a year-over-year comparison, the median price was $970,000 in May 2022, a 3.6 percent difference.

May 2023 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Statewide, the sales pace for existing, single-family homes was up 9.8 percent in May 2023, compared to April 2023, and it as down 23.6 percent from May 2022.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 289,460 in May, 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 2023 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

May’s sales pace of 289,460 homes sold was up 9.8 percent on a monthly basis from 263,650 home sold in April 2023 and down 23.6 percent from a year ago in May 2022, when a revised 378,640 homes were sold on an annualized basis.

Sales of existing single-family homes in California remained below the 300,000-unit pace for the eighth consecutive month.

Year-to-date statewide homes sales were down 35.1 percent in May 2023.

Also statewide, the median home price in May 2023 increased by 3.0 percent to $836,110, compared to $811,950 in April 2023. It was the second straight month for the statewide median home price to exceed $800,000. In a year-over-year comparison, the statewide median home price was down 6.4 percent from $893,200 in May 2022.

The statewide median price continued to rise and reached the highest level in nine months. Tight housing supply and more high-end homes being sold relative to prior months continued to put upward pressure on prices. 

“The bounceback in May’s home sales and price shows the resilience of California’s housing market and is a testament to the value that consumers place on homeownership,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “The housing market is stabilizing and even showing signs of improvement as competition is on the rise again; nearly half of homes are selling above asking price, fewer sellers are reducing listing prices, and homes for sale are going into pending status in just two weeks compared to more than 30 days early this year.”

“While home sales rose solidly in May, we don’t expect to see a rapid recovery because of the lock-in effect that’s keeping prospective sellers with low interest rate mortgages from listing their homes on the market and keeping inventory extremely tight.” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “Consequently, we expect prices to continue to rise on a month-to-month basis for the next few months because of the shortage of homes for sale. Even with reduced homebuyer demand, California still has more homebuyers than homes to put them in. It is this imbalance between supply and demand that continues to put upward pressure on home prices and nudge the median price up month over month since the beginning of the year.”

Other key points from C.A.R.’s May 2023 resale housing report include:

-- At the regional level, all major regions recorded year-over-year sales declines in May 2023. Southern California declined 22.3 percent from May 2022.

-- At the regional level, median home prices dropped from a year ago in all major regions. Southern California home prices declined by 5.3 percent in May 2023.

-- Despite mortgage rates rising sharply since mid-May and peaking at their highest point in six months, the number of pending sales recorded in May remained steady and only dipped slightly by less than 2 percent from the prior month. The consistent level of open-escrow sales suggests that the California housing market will register closed sales in June at around 275,000, a similar level between what was recorded in April and May.

-- Housing inventory in California dipped in May after a brief bounce-back in April, as sales improved while supply remained tight. The statewide unsold inventory index in May 2023 was flat from last year and declined 16 percent on a month-over-month basis. Assuming a softer sales level in June 2023, the market could see a minor inventory improvement in the upcoming month, but the upward adjustment would be due to a change in demand.

May 2023 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- Housing inventory increased in all price ranges in May 2023, compared with May 2022. In year-over-year comparisons, the unsold inventory index recorded a gain of 21.1 percent in the $1 million-and-higher price sector and remained flat in the $500,000-$749,000 price range (zero percent). Lower inventory levels dipped year-over-year in the $750,000-$999,000 sector (-9.1 percent) and the sub-$500,000 sector (-4.3 percent).

-- The statewide unsold inventory index on a monthly basis declined to 2.1 months for May 2023, compared to 2.5 months for April 2023 and 2.1 months for May 2022.

-- In San Diego, in May 2023, the inventory of available homes for sale was 1.7 months, compared to 1.9 months in April 2023, 1.7 months in March 2023, 2.3 months in February 2023, 2.7 months in January 2023 and 1.9 months in May 2022. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell-out given the current rate of sales.

-- Statewide, the median number of days it took to sell a California single-family home was 17 days in May 2023, 20 days in April 2023 and 11 days in May 2022.

-- In San Diego, the median number of days it took to sell an existing, single-family home was 12 days in May 2023, compared to 12 days in April 2023, 15 days in March 2023 and eight days in May 2022.  Other median-time-on-the-market figures in San Diego in 2023 include 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.

-- The statewide, sales-price-to-list-price ratio was at 100 percent in May 2023, 100 percent in April 2023, 99.1 percent in March 2023, 97.7 percent in February 2023 and 96.5 percent in January 2023. A year ago, in May 2022, the ratio was 103.4 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

-- The 30-year, fixed-mortgage interest rate averaged 6.43 percent in May, up from 5.23 percent in May 2022, according to Freddie Mac.

A surge in mortgage interest rates and a shortage of homes for sale is suppressing the California housing market, according to the April 2023 home sales and price report from the California Association of REALTORS® (C.A.R.).

For April 2023 in San Diego, home sales were lower and home prices were higher in month-over-month comparisons between April 2023 and March 2023.

Sales of existing, single-family homes in San Diego County decreased in April 2023 by 8.2 percent in a month-over-month comparison with March 2023, and 36.9 percent in a year-over-year comparison with April 2022.

April 2023 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Meanwhile, the median sales price for an existing, single-family detached home in San Diego County increased in April 2023 to $930,000, compared to $915,000 in March 2023, a 1.6 percent difference. In a year-over-year comparison, the median price was $975,000 in April 2022, a 4.6 percent difference.

Statewide, the sales pace for existing, single-family homes was down 4.7 percent in April 2023, compared to March 2023, and down 36.1 percent from April 2022.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 267,880 in April 2023, 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 2023 if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

April’s sales pace of 267,880 homes sold in April 2023 was down from 281,050 homes sold in March 2023 and down from a year ago in April 2022, when a revised 418,970 homes were sold on an annualized basis.

Sales of existing single-family homes in California remained below the 300,000-unit level for the seventh consecutive month.

Year-to-date statewide home sales were down 37.4 percent in April 2023.

Also statewide, the median home price in April 2023 increased by 3.0 percent to $815, 340, compared to $791,490 in March 2023.

It was the first time in six months, since October 2022, that California’s median home price surprised the $800,000 level.

Despite the price improvement since early this year, April’s median price was lower on a year-over-year basis for the sixth consecutive month, declining 7.8 percent from the revised $884,680 recorded a year ago in April 2022. 

The sizable drop in median price from last year was due partly to the strong price surge in early 2022 when homebuyers rushed into the market to take advantage of low rates before the Federal Reserve began aggressively raising rates.

“While home sales declined in April, the market is getting more competitive as we’re seeing time on the market before selling down to 20 days in April from 33 days in January and the share of homes sold above asking price double from one in five at the beginning of the year to more than two in five in April,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “This increase in market competition continued to provide support to the statewide median home price in April, which climbed above $800,000 for the first time in six months.”

“Home sales remained soft as the lock-in effect continued to tighten housing supply and keep would-be sellers from listing their homes for sale, which contributed to a 30 percent year-over-year drop in new statewide active listings, the largest drop since May 2020 when the pandemic shutdown took place,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “A surge in borrowing costs as mortgage rates surpassed 7% in late February and early March also contributed to the market weakness, as many transactions that opened in those two months were closed in April.”

Looking ahead, C.A.R. has revised its 2023 Housing Market Forecast and projects existing single-family home sales to reach 279,900 units in 2023, a decline of 18.2 percent from the 342,000 units sold in 2022. While home prices in general are expected to improve in the second half of the year, the California median home price is projected to decrease 5.6 percent to $776,600 in 2023, down from the annual median price of $822,300 recorded in 2022. C.A.R. also expects the 30-year fixed mortgage interest rate will average 6.3 percent for the year.

Other key points from C.A.R.’s April 2023 resale housing report include:

-- At the regional level, all major regions recorded year-over-year sales declines in April 2023. Southern California declined 37.4 percent from April 2022.

-- At the regional level, median home prices dropped from a year ago in all major regions. Southern California home prices declined by 6.2 percent in April 2023.

-- Housing inventory in California bounced back after dipping month-over-month for two straight months. The statewide unsold inventory index in April 2023 also increased from last year, jumping 38.9 percent on a year-over-year basis. The surge in the inventory continued primarily due to low housing demand as existing home sales remained below the 300,000 benchmark.

-- Housing inventory increased by at least 20 percent in all price ranges in April 2023, compared to April 2022. Homes priced at $1 million and higher gained the most in unsold inventory with a 64.7 percent increase, followed by the $500,000-$749,000 price range (33.3 percent), the $750,000-$999,000 price range (21.1 percent), and the sub-$500,000 price range (26.3 percent).

April 2023 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

-- The statewide unsold inventory index on a monthly basis increased to 2.5 months in April 2023, compared to 2.2 months in March 2023 and 1.8 months in April 2022.

-- In San Diego, in April 2023, the inventory of available homes for sale was 1.9 months, compared to 1.7 months in March 2023, 2.3 months in February 2023, 2.7 months in January 2023, and 1.6 months in April 2022. Inventory levels indicate the number of months it would take for the available supply of homes on the market to sell out given the current rate of sales.

-- The median number of days it took to sell a California single-family home was 20 days in April 2023, 24 days in March 2023, and 11 days in April 2022.

-- In San Diego, the median number of days it took to sell an existing, single-family home was 12 days in April 2023, compared to 15 days in March 2023 and eight days in April 2022. Other median-time-on-the-market figures in San Diego in 2023 include 17 days in February and 26 days in January. The median represents a time when half the homes sell above it and half below it.

The statewide, sales-price-to-list-price ratio was at 100 percent in April 2023, compared to 99.1 percent in March 2023, 97.7 percent in February 2023 and 96.5 percent in January 2023. A year ago, in April 2022, the ratio was 104.2 percent. The 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 last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

-- The 30-year, fixed-mortgage interest rate averaged 6.34 percent in April, up from 4.98 percent in April 2022, according to Freddie Mac.