Call that what you want, but the pace of purchase of California remains below the bottom of the great recession.
My faithful calculation sheet has examined a new set of house sales figures created for the Southern California News Group by Real Estate Tracker Attom. These vast statistics follow closed transactions per month and include existing and newly built residences, whether houses or condominiums. Data date from 2005.
In February, 22,002 residences in California were purchased. Although it is down 1% per year, it is also the third higher February and 24% lower than the 20th anniversary of the month.
Since the Federal Reserve began to increase interest rates at the beginning of 2022 to fight against the worst access to inflation in four decades, the pace of house purchase collapsed / refrigerated / crushed / whatever.
The deep reluctance to buy can be seen in the sales account of houses in 12 months. Throughout California, 322,813 residences were sold during the year ending in February, down 40% in three years and 27% less than the two decades.
However, think about this ugly marker: during the darkest days of the great recession, this criterion of sale in California has the substance at 331 196 of the year ending in May 2008. The rate of sale on the level of the State then fell below this statistical valley in June 2023. The pace remained slower than the Nadir of the era of the accident for 21 months.
To be fair, buyers are now almost 10% more active than at the lowest of 305,049 sales in June 2024. However, the purchase of today’s house is less than half of the historic sales peak – 698,782 purchases in December 2005. Which is back in the days of subprime bubbles.
The price is false
A major housing evil is that more expensive mortgage rates do not yet have price gains for houses in California.
The median selling price in February was $ 740,000, up 12% in these three years. The peak was $ 750,000 in May 2024, so we are only 1% reduction on all time.
So think about affordability in the past 20 years – comparing price movements and the average fixed rate rate at 30 years at 6.8% in February 2025 against 5.6% in February 2005.
A Californian buyer of this house at a median price would have seen his monthly payment estimated at home – assuming a 20% payment – increase by 110% over two decades.
However, household revenues across the state level increased only by 82% during the same period, according to the census office.
Jonathan Lansner is the business columnist for Southern California News Group. It can be attached to jlansner@scng.com
Originally published:
California Daily Newspapers
