After just last month announcing the resiliency of California home sales in February despite rising interest rates, figures released today by the California Association of Realtors (CAR) show sales volume in the state slipped in March as median home prices hit a seven-month high.
Existing, single-family home sales totaled 267,470 last month, a decline of 7.8% from February and a 4.4% drop year-over-year. On a year-to-date basis, home sales exceeded the level experienced in the first quarter of 2023 by 0.7%, but that gain continued to shrink in March.
The sales pace remained below the 300,000-threshold for the 18th consecutive month.
California’s monthly and annual drop in sales volume comes as the level of new active listings in the state increased from a year ago for the third consecutive month, as more sellers listed their homes on the market ahead of the spring home buying season, CAR says.
However, unsold inventory statewide decreased 13.3% on a month-over-month basis, but rose from March 2023 by 23.8%. The Unsold Inventory Index (UII), which measures the number of months needed to sell the supply of homes on the market at the current sales rate dipped from three months in February to 2.6 months in March. The index was 2.1 months in March 2023.
“While home sales lost momentum in March, the housing market remains competitive as we're seeing the statewide median home price reaching the highest level in seven months, and homes selling quicker than last year,” said CAR President Melanie Barker. The median number of days it took to sell a California single-family home was 19 days in March, compared to 24 days in March 2023.
“On the supply side,” Barker added, “the market continues to improve with an increasing number of properties being listed on the market as more sellers begin to accept the new normal.”
Meanwhile, the median priced home in California in March was $854,490, up 6% percent from February and up 7.7% from last year. According to CAR’s report, the YOY gain marked the ninth consecutive month of annual price increases in California.
The values of homes priced at opposite ends of the spectrum differed, though. On an annualized basis, prices for California’s $1 million-and-higher-home market rose 9.9% in March while the sub-$500,000 segment declined by 2.4%. CAR reports that the change in the mix of sales continued to provide upward support to the statewide median price, partly accounting for the “solid increase” in YOY growth rate.
“With mortgage rates reaching the highest levels since mid-November 2023,” said CAR Senior Vice President and Chief Economist Jordan Levine, “the housing market struggled to build on the momentum exhibited in the first two months of this year. While sales could be hindered by higher rates in the coming weeks, the uptick in recent months suggests that we could see a bounce back in housing activity when the market digests the latest inflation report.”
