Home sales in California plunged to the lowest level in 15 years in November, according to the latest data shared by the California Association of Realtors (CAR).
According to a report released on Tuesday, existing single-family home sales were down 7.4 percent last month compared to October and down 5.8 percent from November 2022, totaling 223,940. It was the biggest monthly decline in the past year, which plunged existing home sales in California to the lowest level since the Great Recession of 2008-2009.
Existing home sales were also down 25.9 percent since the beginning of the year, as homebuyers struggle with the high cost of borrowing and homes that have remained expensive despite a cooling of prices nationwide. It was also the third consecutive month that existing single-family home sales remained below the 250,000-unit mark in the state.
"Elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November," 2024 CAR President Melanie Barker said in a news release shared with Newsweek, adding that the future could look a bit more rosy for California homebuyers now that the Federal Reserve has announced it will soon shift toward cutting rates.
"With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could reenter the market early next year," she said.
The situation with prices in California is a little more complex. Some of the most overvalued urban areas in the state have experienced dramatic price drops in the past year, with San Francisco reporting a price decline of over 10 percent from the 2022 peak, according to the Zillow Home Value Index (ZHVI).
But a chronic lack of inventory has kept prices in the state from crashing and has recently pushed them back up.
According to CAR, home prices in the state were down 2.2 percent in November from the previous month, but were up 6.2 percent from November 2022, when the nationwide market started to experience a cooling trend.
Despite the grim sales numbers, CAR Senior Vice President and Chief Economist Jordan Levine expressed optimism about the future of the state's market. The annual decline in home sales reported in November was the smallest in the last 20 months.
"Going into 2024, the recent decline in mortgage rates, along with the upward momentum in home prices, could motivate more would-be sellers to list their homes for sale in the spring homebuying season," he said in a statement shared with Newsweek.
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Giulia Carbonaro is a Newsweek Reporter based in London, U.K. Her focus is on U.S. and European politics, global affairs ... Read more
