California Association of Realtors November existing-home sales report:
The California Association of Realtors reported that existing home sales totaled 223,940 units on a seasonally adjusted annualized basis in November, down 7.4% from October. November marked the third straight month of the annualized sales rate dropping under 250,000, a level that was thought could never happen, and the 29th straight month of year-over-year declines in sales. Year-to-date, the number of homes sold was down 25.9% in November.
Prior to 2022 home sales have not dropped below 400,000 in decades. High-interest rates have caused many potential home sellers to put off their move. In a normal year about 50% of sales are what we call move-up buyers. Those are people selling a home to purchase another. When your mortgage is at a 3% rate, it’s difficult to sell it and purchase another with a mortgage at a 7% rate. For example, if you own a $2 million dollar home with a $1 million mortgage at 3%, your payment with taxes and insurance is about $4,500. If you put your $1 million in equity down on your new $4 million dollar home and obtained a $3 million loan at 6.5% (down from almost 8% two months ago) your payment with tax and insurance would be around $24,000 a month. That’s a big jump. When people put off their move it reduces the number of homes for sale. This is exactly what is happening now.
The statewide median price paid for a home in November was $822,200, up 6.2% from a revised $774,150 a year ago.
There was a 3-month supply of homes on the market, up from a 2.7-month supply of homes for sale in October, and down from a 3.2-month supply one year ago.
The graph below shows sales data by county in Southern California.
