The September Rebound: Existing CA Home Sales Reverse a Four Month Decline

So the story for the last 4 months has been one of decline: August home sales dipped from July. July home sales dipped from June. June home sales dipped from May… you get the gist. But in September this 4 month losing streak was snapped where California home sales closed out Q3 posting the largest monthly increase in over a year.

State-wide home sales: In September, existing, single-family home sales totaled 438,190 on a seasonally adjusted annualized rate, up 5.6% from August and down 10.5% from September 2020. Year to date, California home sales are still up 16.8%.  

State-wide median prices: After median home prices set a new record in August at $827,940, median home prices dropped 2.3% to $808,890. This was 13.5% higher when compared to the September 2020 and the sixth consecutive month where priced remained above $800,000 benchmark. But the year over year price gain was the smallest in 14 months, as prices in the high end of the market have been growing at a slower pace than the low-end of the market.  

What’s happening with inventory? The unsold inventory index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales. The unsold inventory was unchanged – staying at 1.9 months in September – and slightly below last year’s levels of 2 months.

What’s happening with interest rates? According to Freddie Mac - In September the 30 year fixed averaged 2.9%, up from 2.89% year over year and the five-year adjustable rate averaged 2.45 percent, down from 2.98% year-over-year.

“As we move into the off-homebuying season, we should see market competition easing and home prices moderating, giving those who waited out the highly competitive market earlier this year an opportunity to revisit buying…

Interest rates are expected to remain low and the availability of homes for sale should improve, which should boost homebuying interest and spur sales."

-C.A.R. President, Dave Walsh

What’s happening in Los Angeles County?

For single family homes:

• 5,232 homes hit the market in September, up 9.14% year over year and down 6% from August
• 4,557 homes were sold in September, up 1.49% year over year and down .61% from August.
• Median listing prices (the point at which one half the homes list for more and one half list for less) continued to stay above $800,000 in September at $859,900, down 1.28% from August’s median listing price of $869,999 and up 8% from September 2020.
• Median Selling Price (the point at which one half the homes sell for more and one half sell for less) dropped to $890,000, down 1.28% from August’s median selling price of $903,000 and a 9.88% increase from September 2020.
• There's the list price (what the seller hopes to get) and the sale price (what they actually get). The list/sales price ratio continues to stay above 100% - at 103.2% in September. 
• Shrinking inventory didn’t stop potential home buyers from competing for homes. Both median and average days on market in September dropped from last year: 12 median days on market, down 29% year over year, and 25 average days on market, down 24% year over year.  

For condominiums:

• 2,038 new condos hit the market in September, down 6.82% from August and up 15% year over year.
• 1,745 condos were sold in September, down 7.65% from August and up 15% year over year.
• Median listing prices (the point at which one half the condos list for more and one half list for less) increased 3.23% from August to $619k, and also up 10.68% from September 2020.
• Median Selling Price (the point at which one half the homes sell for more and one half sell for less) also increased 1.59% to $630k from August, and up 12.1% from September 2020.
• There's the list price (what the seller hopes to get) and the sale price (what they actually get). In September, we’re continuing to break above the 100% list/sales price ratio with a 102.2% list/sell price ratio.
• Shrinking inventory didn’t stop potential condo buyers from competing for condos. Both median and average days on market in September dropped from last year: 14 median days on market, down 6.67% year over year, and 28 average days on market, down 9.68% year over year.  
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What this means for you:

The economic recovery combined with continued low interest rates should bode well for sellers as we head into the off-market home buying season. However, sellers should take note of how and when the $1T Infrastructure bill could impact the market, their property and profit potential. Until next month….