According to the California Association of Realtors, home sales in the state fell to the lowest level since the Great Recession as the housing market suffered the full impact of the coronavirus pandemic in May.
CAR’s May report shows sales remained below 300,000 for the second straight month.
“The sharp sales drop in May was the steepest we’ve seen in some time, but there are encouraging signs that show the market is recovering and should continue to improve over the next few months,” said 2020 CA. president Jeanne Radsick in a news release.
Three Months of Double Digit Declines
“As we predicted, May home sales took the full impact of the coronavirus pandemic as much of the state remained in lockdown during the past few months and caused three straight months of double-digit sales declines, which we haven’t experienced since the Association began reporting monthly home sales in 1979,” said CAR economist Leslie Appleton-Young.
The May statewide median price of $588,070 for existing single-family homes in the state was down 3.0 percent from April and down 3.7 percent from May 2019, when the median price was a revised $610,940.
“With pending home sales up a stunning 67 percent in May, buyer demand is on the upswing amid record-low rates that are making monthly mortgage payments $300 less than a year ago,” said Radsick.
Reflecting the dramatic change in market conditions, a monthly Google poll conducted by CAR in early June found 40 percent of consumers said it is a good time to sell, up from 29 percent a month ago, but down from 51 percent a year ago.
The market uncertainty has not curbed the optimism for homebuying as much; 32 percent of the consumers who responded to the poll believed that now is a good time to buy a home, sharply higher than last year, when 26 percent said it was a good time to buy a home.
May 2020 Resale Housing Report
Key points from CAR’s May 2020 resale housing report include:
- All major regions dipped in sales by more than 35 percent from last year, with the Bay Area and Central Coast dropping the most at -51.1 percent each, followed by Southern California (-45.6 percent), and the Central Valley (-36.6 percent).
- Fifty of the 51 counties tracked by CAR experienced a year-over-year loss in sales, with Monterey declining the most from last year at -63.0 percent, followed by Mendocino (-59.7 percent), and San Benito (-59.2 percent). Counties that experienced a sales decline from last year averaged a loss of 42.2 percent from the year prior. Del Norte was the only county with an increase from last year.
- CAR’s unsold inventory index jumped to 4.3 months in May from 3.4 months in April and was up from 3.2 months in May 2019. 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.
- The 30-year, fixed-mortgage interest rate averaged 3.23 percent in May, down from 4.07 percent in May 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.16 percent, compared to 3.65 percent in May 2019.