The housing market in California had been able to fight back against the housing shortage and lack of affordable housing for months, but January saw the number of sales drop below 400,000 — totaling 388,800 — for the first time in almost two years. This is down 7.6% from December, and almost 3% from last January. Meanwhile, home prices are continuing to grow, with the median price above $500,000 for the eleventh straight month.
In Southern California, month-to-month sales decreases range from -8% in Ventura County to -27.3% in Los Angeles County. Month-to-month price increases range from 5.4% in Orange County to 12.9% in San Bernardino County. Ventura County and San Bernardino county are fortunately seeing an overall year-to-year increase in sales, of 3.7% of 5.6% respectively, but elsewhere in Southern California the year-to-year decrease is as much as -6.8%. Unsold inventory remains relatively close to last January, but time on market is lower everywhere, as buyers are scrambling to make offers on what few properties they can.
Some brokers, especially in high end neighborhoods, are speculating that buyers have run up against price increases above their comfort range. With mortgage interest rates up .5% from December, and more rate increases forecast for 2018, it could be the higher monthly costs will create a larger inventory as buyers walk away from the table.