What California’s Real Estate Slowdown Means For Home Prices
6 months of slipping sales suggest a economic slowdown in California, what does that mean for home prices?
Home sales are down in California for the for the 6th month running, suggesting an impending slowdown even as prices have set new records.
Despite strong closed escrow sales in June, California pending home sales slipped and they are not expected to tick back up as the peak home buying season winds down, the California Association of Realtors said this week.
Even as sales slow, prices continue to rise, reaching new record highs.
Analysts predict the limited supply will drive prices way beyond the affordability of the average California family.
A lack of inventory appears to be slowing sales while driving up prices, and that is not likely to change anytime soon.
Only a recession could reverse the trend, and that is not likely now.
Based on signed contracts, Y-Y statewide pending home sales fell for the 6th straight month in June on a seasonally adjusted basis, with the Pending Home Sales Index declining 0.9% from 119.0 in June 2016 to 117.9 in June 2017, according to a CAR statement.
California pending home sales also slipped on a monthly basis, decreasing 0.6% from the May index of 118.7.
Pending home sales have declined every month YTD, but the pace of decline has slowed in recent months.
Across the State, the pattern was mixed.
Prices are still climbing at a record breaking clip, according to real estate tracking firm CoreLogic.
The median price of a home in Los Angeles County in June climbed 7.4% from last year to $569,000.
Also, it climbed in Orange County by 6.1% from 2016 to $695,000, by 12.3% in San Bernardino County and 7.5% in Riverside County to $357,000
Pending sales in parts of the Southern California Region were mixed.
Some continued their upward trend in June and posted a 2.5% improvement from the prior year, as San Bernardino County and Orange County saw healthy bumps of 10.3 and 8.3%, respectively, the statement said.
Pending sales in San Diego (-3.6%), Riverside (-6.9%), and Los Angeles (-1.7%) counties declined from last June.
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