California sees its first home sales drop in four years
California's housing market ended 2018 on a down note, with sales for 2018 as a whole down for the first time in four years and home price gains showing signs of leveling off, Realtor economists reported.
A volatile stock market and political and economic uncertainty contributed to the market slowdown, according to the California Association of Realtors. But the main culprit was fewer buyers able to afford a home.
"California's housing market in 2018 was hindered by endlessly rising home prices and interest rate hikes, which combined to erode housing affordability and hamper home sales," CAR Chief Economist Leslie Appleton-Young said in a statement. "While the statewide median home price surpassed its previous peak and set a new record in 2018, annual home sales fell for the first time in four years."
In all, 402,705 existing single-family homes changed hands last year, compared with 424,890 in 2017, CAR reported.
The median house price for the year as a whole — or price at the midpoint of all 2018 sales — was $570,000, up 6% from 2017. That's the second-smallest decline since 2011.
The slowdown was even more pronounced in December.
The California house price increased 1.5% in December, while sales fell 11.6%.
Thirty-nine out of 51 counties posted a sales decline in December, with an average drop of 20%.
Southern California posted a year-over-year sales drop of 17.8%, with declines of 16.3% in Los Angeles County, 18.3% in Orange County and 19.8% in the Inland Empire.
Orange County's median house price dropped from year-ago levels for the first time since the housing downturn ended more than six years ago. Orange County's median house price was $785,000, down 0.1% from $785,500 in December 2017.
Elsewhere in Southern California, the December median was $588,140 in Los Angeles County (up 1.8%), $398,000 in Riverside County (up 3.4%) and $295,000 in San Bernardino County (up 6.1%).
"The housing market continued to shift in December and drift downward as sales have fallen double digits for the past three out of four months," said CAR President Jared Martin. "This trend is expected to continue, as buyers remain cautious about the murky housing market outlook."