Home prices fell across California last month with some major housing markets experiencing the first year-over-year drop in prices since the start of the recovery, according to a report by the California Association of Realtors. Sales also plummeted statewide.
Home prices in the Bay Area and Los Angeles, Orange, and San Diego counties dropped in March along with dozens of other regions examined by the industry group. March’s statewide median home price was $565,880, down 5.9 percent from February, according to CAR. Industry analysts, however, saw a silver lining in the numbers, couching it as a slight price correction that could help sales by luring reluctant buyers off the sidelines.
The numbers seem to support the notion of a price correction with the biggest drop in sales and pricing hitting the most expensive housing markets statewide.
According to CAR’s findings, “Sales dropped on a non-seasonally adjusted annual basis in all major regions, with double-digit sales declines in the Los Angeles Metro, Inland Empire regions and San Francisco Bay Area while the Central Coast and Central Valley regions experienced single-digit declines. Non-seasonally adjusted sales in the San Francisco Bay Area were down 10.8 percent from March 2018. Home sales in all nine Bay Area counties fell from a year ago, especially in Napa and Sonoma counties, which suffered the largest decreases.”
Part of the problem is that, despite the strong economy and low interest rates, homes are sitting on the market for longer periods of time and inventory is creeping up, a set of circumstances favoring buyers.
“As a seller, you have a lot more competition for your unit than a year ago or even two years ago,” CAR senior economist Jordan Levine, told The Orange County Register. “It’s tough out there, but there’s no reason to panic.”
CAR’s March housing report found that:
- Los Angeles County median home prices dropped by 0.7 percent while sales plunged 13% year-over-year.Santa Barbara County saw the worst year-over-year price decline at a 20.5% drop.
- Silicon Valley’s was also hit hard with a 10.6% decline in year-over year prices in Santa Clara County.
- The Bay Area also endured significant price drops, with the media home price dropping 4.1 percent.
- The picture was mixed in the Inland Empire where Riverside County saw median prices go up 3.5% while sales dropped 9.3%.
- San Diego County prices dropped 0.3%, while sales were down 3.9%, a modest decline compared to surrounding regions.
- Orange County, median house prices dropped 1.8%, and sales plunged 12.5% year-over-year.