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California Association of Realtors says rising rates, high prices cooling off sales

What it means for you: Statewide home sales were down 14.4% from June and down 31.1% from July 2021. As we reported last week, western Nevada County’s market saw a similar shift with 18.6% fewer homes sold in July than in June and 36.1% fewer than July 2021.

The California Association of Realtors noted noted in a news release the cooling down continued with rising interest rates and high prices impacting home sales.

“In the midst of the peak home-buying season, high home prices and rising interest rates depressed housing affordability to the lowest level in nearly 15 years, which in turn dampened home sales,” said association President Otto Catrina, a Bay Area real estate broker and Realtor. “However, buying opportunities remain in the coming months for those who have been waiting on the sideline as more listings become available, competition continues to cool off and rates begin to stabilize.”

California’s median home price declined 3.5% in July to $833,910 from the $863,790 recorded in June. The July price was 2.8% higher than the $811,170 recorded last July and was the smallest year-over-year price gain in more than two years, according to the association.

The price moderation is largely attributed to a change in the mix of sales in July, as million-dollar home sales plummeted nearly 25%  from June, CAR reported.

In western Nevada County, the median sale price of a home was $584,000, still 3.4% higher than the $565,000 median recorded in July 2021, even with sales slowing so significantly year over year.

“Home sales have taken a trouncing as the market has shifted in response to the recent surge in interest rates, and pending sales suggest that the market could remain soft in August,” said association Vice President and Chief Economist Jordan Levine. “The pace of sales declines is expected to slow in the coming months, however, as rates continue to stabilize, market volatility begins to subside and supply conditions further normalize.”

For more on statewide monthly sales, see the California Association of Realtors report here:

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