The November home sales numbers from the California Association of Realtors and a deeper look into the data shows a looming affordable housing crisis.
In short, California home sales dipped slightly in November from a year ago, while the median sales price recorded its highest year-over-year gain since January 2016, according to CAR.
This up month-on-month and CAR said the market performed better-than-anticipated. However, there are some bigger concerns on how next year’s economic conditions will impact the lower income earners in the Golden State.
“While high-priced markets have performed well in recent months, sales remain lackluster in the lower-priced segments as the supply of affordable homes continues to shrink,” said CAR President Steve White, in a statement.
“This tale of two markets is not a story that we enjoy telling as the dichotomy in the market is posing some affordability challenges to many potential homebuyers who want to enter the market,” he added.
Next year, the Federal Reserve is expected to raise rates up to 4 more times. This will push out more potential first time homeowners as affordability will be reduced.
Mix that with dwindling properties available to sell and the numbers begin to turn south:
In the Bay Area and Southern California, supply has been especially low; every single county in the Southern California region (aside from San Bernardino) had a reduction in listings from the previous year in November. Active listings in Los Angeles, Orange, Riverside, and San Diego counties all declined by more than 8% from last year. In the Bay Area, every county had fewer active listings from last year with declines of nearly 17% for the region and a 36% year-over-year decline in active listings in Santa Clara.
The $546,820 November median price was 0.1% higher than October’s $546,430 price but climbed 8.8% from the revised $502,490 recorded in November 2016.
Currently, year-to-date home sales are running 1.5% ahead of last year’s pace, but the annual sales pace keeps on declining from the first quarter 2017.