The coronavirus lockdown devastated home sales in California in May, causing transactions to drop 41.4% from the previous year, the California Association of Realtors reported on Tuesday, June 16.
This is the largest year-over-year decline since November 2007.
Median house prices, meanwhile, have also fallen from levels a year ago, the first such decline in eight years.
The trend reflects real estate deals that closed during the height of the foreclosure in March and April, when open houses moved online and buyers and sellers pulled out of the market. However, market data reflecting more recently opened escrows shows that a rebound is underway.
“The sharp drop in sales in May was the biggest we’ve seen in some time, but there are encouraging signs that the market is recovering and is expected to continue improving over the next few months,” said CAR President Jeanne Radsick Bakersfield.
The Los Angeles metro area saw a 46% drop in sales last month, the largest annual percentage drop for the area since October 2007. But house prices were up from last year’s levels in every county in Southern California except Orange, where the median – or the price in the middle of all sales – fell 1.2%.
The numbers reflect closed sales of existing single-family homes, which account for more than two-thirds of all residential transactions.
CAR said 238,740 homes would sell for a full year at the pace of May sales. This was the slowest sales pace in the state since the Great Recession began 13 years ago. The last full year with sales as slow as in May was 1982, a year of recession where interest rates averaged 16% (up from 3.2% last week). May sales were also down 13.9% from April.
All but one of the 51 California counties tracked by CAR saw year-over-year sales decline last month, according to the report, and all parts of the state saw sales drop by at minus 35%.
âAs we expected, home sales in May were fully impacted by the coronavirus pandemic, as much of the state has been stranded in recent months and caused three straight months of declining prices. double-digit sales, âsaid CAR chief economist Leslie Appleton-Young. in a report.
Meanwhile, the statewide median home price fell for the first time since February 2012, falling 3.7% to $ 588,070.
Southern California home prices were more stable. In Los Angeles County, the median home price rose 1.4% to $ 546,930. Riverside County registered a gain of 3.4% to $ 434,480; and San Bernardino County saw its prices increase 1.6% to $ 320,000.
Prices are lower in Orange County, the region’s most expensive real estate market. The median of a single-family home hit $ 834,550 last month, down from the previous year’s levels for the fourth time in a year and a half.
The numbers show that transactions are rebounding somewhat. New escrow deposits in Los Angeles, Orange, Riverside and San Bernardino counties were up 48% as of June 11 from the previous month and 2% from the previous year, according to Reports On Housing.
Statewide, escrow deposits were down 6% as of June 6, according to Zillow – indicating that sales closed in June and July will likely see a much smaller drop than in May.
The “perception gap” of buyers is also showing signs of improvement, according to a survey of CAR officials. Agents said 77% of buyers expected prices to drop in late May, down from 90% a month earlier. Twenty-nine percent said sellers were cutting prices at the end of May, down from 33% a month earlier.
âWhile we expect sales activity to remain below pre-COVID-19 levels,â said Appleton-Young, âclosed sales are expected to improve markedly as the gradual reopening of the economy continues and consumers feel more confident to return to the market.