California home sales recorded the slowest growth in seven years with a decline in deals below $50,000, according to a CoreLogic report. The sales in the Golden State dropped on a year-over-year basis for the third consecutive month, hitting a seven-year low, the report found. It also pointed out that constraints in affordability and an increasing number of cautious buyers continue to weigh on the market.
CoreLogic public records data found that an approximate of 38,159 new and existing houses and condos were sold statewide, recording an increase from 12.5 percent in September 2018 The report reflects an increase of 1.5 percent in the average change in sales since 2000. Year-over-year sales dropped, recording annual declines of 9.3 percent,7.1 percent and 17.1 percent this June, August, and September respectively.
Sales of $500,000 or more moved up by 0.4 percent and $1 million-plus deals is at 5 percent compared to last year. Sales below $500,000 fell 13.1 percent on a year-over-year basis. The report indicated that affordability took a serious hit with a rise in mortgage interest rates rise and low inventory, among lower-cost homes, undermining sub-$500,000 sales.
According to CoreLogic, the median price paid for all new and existing houses and condos sold across the state in October 2018 was $487,000—up 0.4 percent from September and up 5.9 percent from October 2017.
An annual gain of 5.9 percent in October’s median sale price is reflective of the impending affordability challenge many would-be buyers will face, the report noted. Over the past year, the state’s median-priced homes projected a sharp increase in monthly principal-and-interest mortgage payment at 18.2 percent. Absentee buyers – including investors and second-home buyers – accounted for 22 percent of the state’s home purchase transactions in October, up from 21.5 percent a year earlier, the report said.
Read the full report here.