California’s housing market kicked off the new year in January 2022 with a bounce back from December’s four-month low, as housing demand remained strong, according to the latest home sales and price report from the California Association of REALTORS® (C.A.R.).
The number of closed escrow sales of existing, single-family detached homes statewide on a seasonally adjusted annualized rate was up 3.4 percent in January 2022 to 444,450, compared to 429,860 in December. The January 2022 sales pace was down 8.3 percent from a year ago when 484,760 homes were sold on an annualized basis. The year-over-year sales decrease was the seventh straight decline and the smallest in six months.
The statewide annualized sales figure, collected from more than 90 local REALTOR® associations and MLSs statewide, represents what would be the total number of homes sold during 2022 if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
In San Diego, home sales in January 2022 were lower in month-over-month and year-over-year comparisons. San Diego home sales in January 2022 declined 28.2 percent, compared to December 2021, and were 6.7 percent lower than January 2021.
January 2022 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)
Meanwhile, the California median home price dipped below the $800,000 benchmark for the fourth straight month as the seasonal slowdown continued. Home prices continued to decelerate as a shift in the mix of sales toward less expensive homes. The statewide median price declined to $765,580 in January, down 3.9 percent from December’s $796,580, and was up 9.4 percent from the $699,920 recorded in January 2021. While January marked the first time since July 2020 that the state did not record a double-digit annual gain in its median price, the statewide median price is expected to edge higher as the market moves into the spring homebuying season in the next few months.
In San Diego, the median sales price for an existing, single-family detached home was $875,000 in January 2022, a 4.6 percent increase compared to the $836,700 price in December 2021. The January median price was 19.9 percent higher than a year ago at $730,000 in January 2021, more than a $100,000 increase in one year.
“The buoyant housing market continues in 2022 as buyers returned from the holiday season to take advantage of the still favorable lending environment before interest rates climb further,” said C.A.R. President Otto Catrina, a Bay Area real estate broker, and REALTOR®. “With prices leveling off, housing supply showing a slight improvement and competition easing during the off-season, buyers who missed the opportunity to buy were eager to get back to the market at the start of the new year.”
“It’s encouraging to see the market momentum from the last two years being carried forward into 2022 and the economy continuing to recover. January’s sales remained above pre-pandemic levels, and new purchase mortgage applications are still registering strong numbers,” said C.A.R. Vice President and Chief Economist Jordan Levine. “However, a surge in interest rates in the past few weeks is concerning and will likely create affordability headwinds for buyers, which may result in housing demand being curtailed in the upcoming months.”
Other key points from C.A.R.’s January 2022 resale housing report include:
-- At the regional level, nearly all major regions in California recorded a decrease in sales on a year-over-year basis. The San Francisco Bay Area had the biggest year-over-year sales decline of all regions at -22.3 percent. Central Coast (-20.7 percent) and Southern California (-10.1 percent) also experienced double-digit sales losses in January.
-- Home prices continued to grow in all five major regions in the state, with all five of them recording double-digit annual price increases in January. The Central Valley region had the highest year-over-year price gain with a 17.5 percent increase, followed by the San Francisco Bay Area (14.3 percent) and Southern California (13.8 percent).
-- Home prices, in general, continue to rise across the state, with 45 counties showing a year-over-year increase in median price in January.
-- Market competitiveness was less heated than a few months ago but remained elevated in January 2022. Nearly three-fifths of homes (57.3 percent) still sold above the asking price in the latest monthly report but was the lowest level in 11 months. January was the 16th consecutive month since September 2020 that more than half of the homes sold above the asking price.
-- While the statewide median sales-price-to-list-price ratio remained above 100 percent, the January 2022 figure was the lowest level since February 2021. The sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and sellers under current market conditions. The ratio, expressed as a percentage, is calculated by dividing the final sales price of a property by its last list price. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, while a ratio below 100 percent indicates that the price sold below the asking price.
-- California’s unsold inventory of homes was 1.8 months in January 2022, compared to 1.2 months in December 2021 and 2.0 months in January 2021. The December 2021 figure of 1.2 months was the lowest level on record since CAR began tracking this figure in July 1988. Active listings statewide were down 24.1 percent from last year. 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 inventory of available homes for sale in San Diego County in January 2022 was 1.5 months, compared to 1 month in December 2021 and 1.9 months in January 2021. Numbers from previous months in 2021 included: November, 1.3; October, 1.5; September, 1.6; August, 1.7; July, 1.7.
January 2022 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)
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-- The median number of days it took to sell an existing, single-family home in San Diego County in January 2022 was nine days, compared to eight days in December 2021 and nine days in November, October and September 2021. A year ago in January 2021, the number was seven days. Numbers from previous months in 2021 included: August, 8; July, 7; June, 6, May, 7; April, 6. The median represents a time when half the homes sell above it and half below it.
-- Statewide, the median number of days it took to sell a California single-family home in January 2022 was 12 days, the same number in December 2021. Numbers from previous months in 2021 included: November, 11; October, 11; September 10. A year ago in January 2021, the number was seven days.
-- The 30-year, fixed-mortgage interest rate averaged 3.45 percent in January, up from 2.74 percent in January 2021, according to Freddie Mac. The five-year, adjustable mortgage interest rate averaged 2.57 percent, compared to 2.87 percent in January 2021.