Arthur J. Villasanta – Fourth Estate Contributor
San Francisco, CA, United States (4E) – Sky-high record prices for new and existing houses and condominiums in Southern California caused sales of these residences to plunge 11.8 percent in June year-on-year. The result was a carry-over from May, when sales also fell on account of record prices.
The median price paid for all Southern California homes sold in June was a record $536,250, a 7.3 percent increase compared to June 2017, according to CoreLogic, Inc. CoreLogic’s report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.
CoreLogic is an Irvine-based corporation providing financial, property and consumer information, analytics and business intelligence
The record prices in June caused Southern California home sales to fall to the lowest level for the month in four years. Sales fell 1.1 percent compared to May. The weakness was especially marked in sales of newly built homes, which were 47 percent below the June average.
This is partly due to the fact builders are building fewer homes, so there are fewer units to sell. One more reason is the rise in mortgage rates over the past six months, which has significantly increased a borrower’s monthly payment. Worse, rates again rose lasr week, pointing to even further weakness in affordability.
“A portion of last month’s year-over-year sales decline reflects one less business day for deals to be recorded compared with June 2017,” said Andrew LePage, a CoreLogic analyst. “But affordability and inventory constraints are likely the main culprits in last month’s sales slowdown, which applied to all six of the region’s counties and across most of the major price categories.”
CoreLogic reported that sales below $500,000 plunged 21 percent year-on-year, while deals of $500,000 or more fell about three percent, marking the first annual decline for that price category in nearly two years.
“Home sales of $1 million or more last month rose just a tad — less than one percent — from a year earlier following annual gains of between five percent and 21 percent over the prior year,” said LePage.
California, which is one of the largest housing markets in the nation, has been a predictor for the rest of the country. Home prices have been rising throughout the USA amid a critical housing shortage.
Analysts noted that prices usually lag sales by several months, and sales are beginning to crumble even as more inventory comes on the market. The supply of homes for sale increased annually in June for the first time in three years but sales fell for the third straight month.
Article – All Rights Reserved.
Provided by FeedSyndicate