LOS ANGELES — Low inventory and high mortgage rates have led single-family home transactions to their most significant monthly decline in the past year and dropped to their lowest level since the Great Recession, according to the California Association of Realtors.
Single-family home sales across the state fell 7.4% from October and 5.8% year-over-year in November, according to the CAR’s November 2023 resale housing report.
Buy/sell, rent/lease residential &
commercials real estate properties.
The association noted that the statewide median home price of $822,200 is also down 2.2% month-to-month but up 6.2% from the previous year’s $774,150.
“Elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November,” said Melanie Barker, the president of CAR and realtor at Yosemite, in a news release.
Meanwhile, the report found that home sales have dropped 15.5% from October to November this year and 5.1% from the previous year in Los Angeles. Although the number of homes traded is down, the median sold price of a Los Angeles home remains resilient and increased 7.3% from $836,000 last year to $897,000 this year.
In Orange County, sale transactions decreased 12.4% month-to-month but up 3.7% year-over-year. The median sold home price in the county was $1.3 million, an 18% uptick from last year’s $1.1 million price tag.
The report comes a week after the Federal Reserve’s most recent meeting, in which they left interest rates unchanged as inflation eased. Many financial experts believe the central bank’s most recent action is a sign that high-interest rates are a thing of the past and expect cuts (as many as five) are in the near future.
The Fed’s decision bodes well for the housing market, which, after a historic housing run-up during the early part of the pandemic, has seen a steep transaction decline as low inventory and mortgage rates skyrocketed each time the central bank increased interest rates.
Many potential sellers have hunkered down until the market gets better.
Barker remained optimistic about the state’s housing market in the coming year.
“With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could reenter the market early next year,” she said.
Teresa McCarthy, a real estate broker at Bad Beach Broker in Seal Beach, said the housing market is a tale of two sides — buyer or seller.
“I have two listings right now,” she said to Spectrum News. “One under $1 million and one over $1 million. The under $1 million went into escrow very quickly. The over $1 million has been on the market for over 30 days…Anything under $1 million is selling. Over $1 million is a different story.”
She said mortgage rates going down 75 basis points in recent weeks “seems to be making a difference” as buyers scour for-sale homes before prices potentially increase.
“I’m not sure if it’ll drop further due to inflation, but I don’t see it rising anymore,” she said of mortgage rates.
According to Mortgage Daily News, as of Wednesday, the average 30-year fixed-rate mortgage is 6.64%.
With the central bank’s decision to lower interest rates, McCarthy expects the housing market to have a lot of movement in 2024.
“I’m telling my $1 million over listing client Spring is a good time and the time their home will sell,” she said.