Experts say July data shows the market is losing steam
California’s housing market continued to show signs of strain in July as home sales and prices declined for the fourth month in a row compared with last year, according to the California Association of Realtors (CAR).
Closed escrow sales of existing, single-family detached homes totaled a seasonally adjusted annualized rate of 261,820 in July. That figure was down 1% from 264,400 in June and 4.1% below the 272,990 sales recorded in July 2024.
The trade group said the decline marked the 34th consecutive month in which statewide home sales remained below the 300,000 benchmark. Year-to-date sales dipped into negative territory, falling 0.4% for the first time in six months.
Pending sales also weakened, slipping for the eighth consecutive month compared with last year. C.A.R. noted that the decline was the largest since November 2023.
Prices slide for third straight month
The statewide median home price fell to $884,050 in July, a 1.7% decline from June’s $899,790 and 0.3% lower than $886,420 in July 2024. The figure represented a five-month low and marked the third consecutive monthly decline.
CAR president Heather Ozur said the slowdown reflected buyer caution.
“The housing market experienced a modest slowdown in both sales and prices in July as some buyers stepped back, waiting for more certainty in the market and broader economy,” Ozur said. “Encouragingly, mortgage rates have recently declined to their lowest level since last October, and that has already led to an increase in purchase applications.”
CAR senior vice president and chief economist Jordan Levine added that supply and pricing trends point to a cooling market.
“With housing inventory reaching a plateau and the statewide sales-price-to-list ratio hitting a near 30-month low, the market appears to be cooling off slightly as home prices dipped for the third straight month,” Levine said.
Regional and county trends
At the regional level, only two of California’s five major housing markets posted year-over-year sales gains. The Far North rose 4.8%, while the Central Coast climbed 1.7%. Sales fell in the San Francisco Bay Area (-4.1%), Southern California (-1.7%), and the Central Valley (-1.5%).
County data showed uneven performance. Eighteen of 53 counties reported annual sales increases, with Imperial County surging 116.1%. Mariposa (91.7%) and Butte (41.6%) also saw significant growth. In contrast, Mendocino County sales dropped 26.7%, followed by Lake (-22.6%) and Madera (-21.3%).
Price changes also varied across the state. The Central Coast recorded the largest regional gain at 4.9%, while the Far North rose 3.1%. Prices held steady in the Central Valley and Bay Area, but Southern California dipped 0.7%.
Market outlook
Inventory levels continued to rise, with the Unsold Inventory Index at 3.7 months in July, up from 2.9 months a year earlier. Total active listings increased 37.7% year-over-year, reaching a nearly six-year high, though the pace of growth slowed.
Homes took longer to sell, averaging 28 days on the market compared with 20 days in July 2024.
Mortgage rates averaged 6.72% in July, slightly lower than 6.85% a year earlier. While the decline has encouraged more purchase applications, C.A.R. warned that renewed inflation pressures could push rates closer to 7% in the months ahead.
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