Home sales in California fell 13.7% in February from a year earlier, the seventh monthly decline in a row, as housing inventory increased, according to the California Association of Realtors.
The trend bodes favorably for trade-up buyers, according to the trade group.
Sales of existing single-family homes totaled 361,210 units, coming in below the 400,000 level for the fourth straight month and even lower than the revised 418,520 reported in February 2013.
The monthly decline "reflects diminished housing affordability after three years of solid price increases and interest rates that are nearly a full percentage point higher than a year ago," said California Realtors president Kevin Brown in a press release. This year buyers "would have to pay $150 more per month on their mortgage" compared to 2013, "a substantial amount for many would-be home buyers," Brown said.
The median price of existing single-family homes has increased for 20 consecutive months, except in January when the price declined 1.6% statewide to $404,250 in February. Nonetheless, that price, which is "influenced by the types of homes selling as well as a general change in values," was 21.3% higher than the revised $333,180 recorded in February 2013.
The housing supply has shown some improvement since the end of last year, "except for the lowest price range where the inventory for distressed properties is depleted," according to Leslie Appleton-Young, the trade group's chief economist. In the midprice range of $300,000-$750,000, which covers nearly half of all home sales, the inventory is up 27% while the supply of high-end homes—properties priced at or above $1 million, also is up 13% from a year ago, she said in the press release.
Hence, there is an upside to the current market changes, she said, because these trade-up buyers "are expected to dominate the market in 2014, as many of them will be searching for homes in these price categories."