Going up against an 11-year high sale record in June, home sales slumped in July when compared to the June numbers.
Still, when compared to sales figures for this year and last, the number homes sold still hit a healthy mark, according to data release by the Southland Regional Association of Realtors on Thursday.
The 234 homes sold in July dropped nearly 12 percent from the number sold the prior month; and dipped eight percent from a year ago.
Sales of condominiums showed the same pattern when escrows closed on 94 condos – a drop of 21 percent from the same period a year ago and 26 percent from sales in June.
“I believe we’re hitting a point where buyers are resisting rising prices, with price increases coming slower even as the inventory of homes for sale stays too tight,” M. Dean Vincent, president of the SCV Division of the realty association said in a statement.
“There’s still plenty of demand out there and the local economy is improved,” Vincent said, “but low housing affordability and reduced buying power of homebuyers has put a cap on how fast the median price can increase.”
The median price for a single-family home in July came in at $560,000 – nearly 10 percent higher when compared to July 2015. That’s $80,000 more than median price in January 2015.
There are a few factors affecting the market, experts said.
Also putting a damper on sales is the ongoing limited inventory, or number of homes available for sale.
It’s also back to school time, said Connor MacIvor with ReMax. With schools beginning in mid-August, families want to close on homes earlier in the summer.
“Very few parents want to endure the replacing or mid-year enrollment of their school aged children,” MacIvor said in a response to an earlier report on statewide sales.
“They would rather make their move – closing a home in June than risking close after school starts in session in August,” he said.
Despite dropping, sales of condos in July still managed to outpace the average number sold per month in all of 2015.
And the median price for a condo of $331,000 is still on pace with the trends seen in the past 18 months.
“Not surprisingly,” said, “rising prices combined with limited supply and falling affordability translate into fewer sales. “We are hearing that prices have gotten to the point where buyers are hesitant go higher than list price,” Jim Link, the association’s chief executive officer said in a statement.
There’s also more negotiating going on and more sales coming in under list price, especially since the number of all-cash buyers has declined, he said.
MacIvor also noted that it’s a presidential election year and that dynamic can affect sales.
“We are still in a seller’s market. We will see prices flatten out throughout the end of the year,” MacIvor said. “If more sellers decide that ‘now is the time to sell,’ and out-populate the number of buyers, we will see reductions in home prices.”