San Francisco Bay Area, Southern California Home Sales Crater, Prices Begin to Drop. California Pending Sales Collapse 40%

Abstract

Closed sales of single-family houses in California plunged by 8.4% in June from May and by 20.9% from a year ago. All of the five regions had double-digit year-over-year sales declines - and in three of them, sales plunged by over 25%: Southern California, San Francisco Bay Area, and Inland Empire. Listings with price cuts rose to a share of 35.5% of total listings, the highest since 2019, with the median price cut being 5.3%. Prices had gone crazy over the past few years. Pending sales in June - the 40% year-over-year collapse - indicate that month-to-month dips in prices wasn't a blip and are likely to become a trend. Median prices are very volatile, they jump up and down, and can be skewed by changes in the mix of houses that sold, so take median prices with a good dose of caution. In most counties in California, prices are still higher year-over-year. "Normalizing" No one knows what "Normalize" means in the crazy California housing market, where the bottom has now fallen out of sales, but this market will "Normalize further," according to the C.A.R. "With inflation remaining high and interest rates expected to climb further in the coming months, the market will normalize further in the second half of the year with softer sales and more moderate price growth," said the C.A.R. report.