Today I want to talk to you about what’s been going on in our market for the month of July & August 2022. The California housing market stabilized briefly due to a temporary reprieve on mortgage rates in July and early August.
The number of active listings has surpassed its yearly peak, and while it is taking slightly longer to sell a property, the proportion of homes experiencing price decreases has steadied near pre-crisis levels. Both monthly and annual price rises accelerated in August, and pending sales indicate a rebound for homes valued at $2 million and beyond, according to the California Association of Realtors®.
FOR THE MONTH OF JULY 2022
The number of new listings were down 15.30% which is at its lowest level compared to July 2020 & 2021. The Average sales price in July went down 2.52% from the previous month but the median sales price was at its highest level compared to the past 2 years.
Existing home inventory is up 22% from its lowest level in February and Many in the media are claiming that this rise in inventory will lead to a housing crash. But a deeper look shows that this build in inventory is a normal occurrence that happens every spring and summer.
Families want their children to enter a new class at the beginning of the school year. This means they would have to close on the purchase of their new home before September. Naturally, they would have to list their existing home for sale during the spring and summer months to accomplish this, which explains why the inventory build occurs this time each year.
Below are the FAST Stats for July 2022 for Orange County along with some of the highlights pulled out.
- Closed transactions are down -40.9% for detached homes and -35.9% for attached year over year
- New listings are down -26% for detached homes and -31% for attached year over year
- Inventory is up +27.6% for detached homes and up +22.2% for attached year over year
- Average sales price for detached properties is up +10.5% and +11.2% for attached year over year
FOR THE MONTH OF AUGUST 2022
Monthly and annual home price growth accelerated in August in the California Housing Market. For the first time in five months, California house sales also increased in August. It was mainly due to a window of opportunity generated by a temporary decline in mortgage rates that created a little more favorable lending climate, according to C.A.R.
We saw an increase of inventory by 42% compared to the previous 3 months' average. The Average sales price was at $1.31M & Median List Price was at $1.09M. In the addition, the number of properties sold in August 2022 was 1844, which was down 18% from the previous month
Below are the FAST Stats for August 2022 for Orange County along with some of the highlights pulled out.
- Closed transactions are down -28.8% for detached homes and -34.3% for attached year over year
- New listings are down -32.5% for detached homes and -30.4% for attached year over year
- Inventory is up +20% for detached homes and up +23.5% for attached year over year
- Average sales price for detached properties is up +11.2% and +14.1% for attached year over year
Additionally, the number of existing homes for sale currently is less than half of what was available pre-COVID. So, the increase we have seen is actually from a historic low. And of those homes counted in inventory, more than half are under contract. This means true available inventory is even less than the headline.
The increase in inventory from such low levels isn’t all bad, as it makes purchasing a home a little easier. And while demand has cooled, it is highly unlikely that the housing fears in the media will materialize. To see what the appreciation forecast is in your local market, contact me!
