Note: Remember sales were weak in April and May 2020 due to the pandemic, so the YoY comparison is easy.
After months of breakneck market competition, California home sales moderated in May as buyer fatigue set in, while the median home price set another record high, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 445,660 in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2021 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
May home sales dipped 2.7 percent on a monthly basis from 458,170 in April and up 86.7 percent from a year ago, when 238,740 homes were sold on an annualized basis. The sharp yearly sales jump was expected as the housing market was hit hard by the pandemic shutdown last year, when home sales dropped to the lowest level since the Great Recession.
“The overheated housing market is showing signs of a much-needed cooling and could be a sign of waning buyer interest as the torrid pace of home price increases and buyer fatigue adversely affected demand,” said C.A.R. President Dave Walsh. “We’re seeing many would-be buyers taking a break and hoping to see more listings as the economy reopens and prospective sellers list their homes for sale.”
The Unsold Inventory Index (UII) improved slightly from 1.6 months in April to 1.8 months in May but remained sharply below last year’s level. The month-over-month rise in inventory is partly due a slight increase in housing supply, but a slowdown in housing demand in May also contributed to a bump in the index. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.
Active listings reached the highest level in six months after a 6.6 percent monthly increase in May and continued to inch up, following the seasonal pattern. Housing supply typically climbs during this time of the year and usually remains on an upward trend until late July/early August. The pace of growth on a month-to-month basis is on par with the average growth rate of 6.7 percent from April to May recorded between 2015 to 2019.
Note that inventory was up 6.6% from April to May.