California Housing Supply Improves

Housing supply in California improved from a year ago but tightened slightly from the prior month as housing demand rose in August, according to the California Association of Realtors. The statewide Unsolved Inventory Index increased to 2.9 months in August from 1.9 months a year ago.  Weaker housing demand continued to be the primary factor for the improvement in the index.  With both closed sales and pending sales slowing by more than 20 percent, active listings have been staying on the market longer, resulting in a year-over-year surge of 57.1 percent in homes for sale last month, said CAR.

Existing single-family home sales in August totaled 313,540, up 6.1 percent from July and down more than 24 percent from August 2021.

In Contra Costa County, the average sale price of a home in August was $889,500 which is 2.2 percent lower than August 2021.  Meanwhile, sales in the county were down more than 27 percent from a year ago, CAR noted.

“Although we do not expect a rapid bounce back because the Fed is expected to continue raising interest rates to get inflation under control, the monthly increase in closed and pending sales suggest the market may have already priced in most of the rate increases to date,” said Jordan Levine, CAR chief economist. “Still, buyers will continue to grapple with rising costs of borrowing, which will keep home sales below the 350,000 annualized pace for the remainder of the year.”