For release:
August 20, 2024   

California home sales reach five-month high as mortgage rates hit lows, C.A.R. reports

• Existing, single-family home sales totaled 279,810 in July on a seasonally adjusted annualized rate, up 3.6 percent from 270,200 in June and up 4.1 percent from 268,840 in July 2023.
  
  
• July's statewide median home price was $886,560, down 1.6 percent from June and up 6.5 percent from $832,530 in July 2023.
  
  
• Year-to-date statewide home sales inched up 0.2 percent.

LOS ANGELES (Aug. 20) – Fueled by the lowest interest rates since spring, California home sales rebounded in July to reach a five-month high, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

Infographic: https://www.car.org/Global/Infographics/2024-07-Sales-and-Price

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 279,810 in July, according to information collected by C.A.R. from more than 90 local REALTOR^® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2024 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

July's sales pace rose 3.6 percent from the revised 270,200 homes sold in June and were up 4.1 percent from a year ago, when a revised 268,840 homes were sold on an annualized basis. The sales pace has remained below the 300,000-threshold for 22 consecutive months, and year-to-date home sales edged up 0.2 percent from the first seven months of 2023.

"California's housing market kicked off the second half of the year with a moderate increase in home sales in July as interest rates continued their downward trend," said C.A.R. President Melanie Barker, a Yosemite REALTOR^®. "Despite transitioning into the off-season, the market should remain vibrant in the coming months if the availability of homes for sale continues to improve, and mortgage rates moderate further in the third and fourth quarters."

The statewide median price slipped in July for the second month in a row, after setting a record high in May. July's median price dipped 1.6 percent from $900,720 in June to $886,560 in July. California's median home price was 6.5 percent higher than the $832,530 recorded in July 2023. The year-over-year gain was the 13th straight month of annual price increases, albeit the smallest since January. Home prices could soften further in coming months but should continue to register moderate year-over-year growth for the rest of the year.

Stronger sales momentum in the higher-priced market segment continued to contribute to median price growth. The $1 million-and-higher segment rose year-over-year in July by 24.5 percent, while sales in the sub-$500,000 segment dropped 1.6 percent. While sales of homes priced above $1 million were down for the second straight month, they made up 35.4 percent of all sales in July, near the recent high recorded in May 2024.

"As the economy showed more signs of cooling in the past couple of months, mortgage rates continued to come down, reaching the lowest level in 15 months," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "This improvement in lower borrowing costs could motivate homebuyers on the sideline to reenter the market, especially since home prices began to soften at the tail end of the homebuying season."  

Other key points from C.A.R.'s July 2024 resale housing report include:

• At the regional level, home sales in all major regions, except for one, bounced back and rose higher than year-ago levels in July. Four out of the five regions in the state registered increases from the same month of last year, with the San Francisco Bay Area (19.2 percent) increasing the most. That was followed by Southern California (11.4 percent) and the Central Valley (10.3 percent) regions, which also grew by double-digits year-over-year. Sales in the Central Coast (5.8 percent) also grew from last year but at a more modest level. The Far North (-0.5 percent) was the only region that recorded sales lower than a year ago, due at least partly to the Park Fire that began in late July.
  
  
• Forty of the 53 counties tracked by C.A.R. recorded sales increases from a year ago, with sales in 25 of them jumping more than 10 percent year-over-year. Trinity (100 percent) posted the largest yearly sales gain, followed by San Benito (37 percent), and San Francisco (34.8 percent). Eleven counties registered sales decreases from last year, with sales in six of them falling more than 10 percent year-over-year and sales in two counties dropping more than 20 percent. Imperial (-29.5 percent) had the biggest annual sales decline in July, followed by Tuolumne (-24.4 percent) and Butte (-19.1 percent).
  
• At the regional level, all major regions experienced an increase in their median price from a year ago in July. The Central Coast posted the biggest price jump on a year-over-year basis, increasing 8.0 percent from a year ago. Southern California (6.1 percent) was a close second and together, they were the only two regions to record an annual price gain of more than 5 percent. The San Francisco Bay Area (3.6 percent) came in third, with the Far North (3.1 percent) and the Central Valley (2.2 percent) trailing behind.
  
  
• Home prices continued to grow on a year-over-year basis throughout the state, with median sales prices in 35 counties rising from a year ago in July. Plumas (45.0 percent) experienced the biggest price increase last month, followed by San Luis Obispo (20.3 percent) and Del Norte (14.6 percent). Eighteen counties registered declines in their median prices from last year, with Tuolumne dropping the most at 16.9 percent, followed by Santa Barbara (-16.8 percent), and Mono (-13.4 percent).
  
  
• The statewide unsold inventory index (UII), which measures the number of months needed to sell the supply of homes on the market at the current sales rate was mixed. The index was 2.9 months in July, down from 3.0 months in June and up from 2.5 months in July 2023. Active listings at the state level rose 39.0 percent on a year-over year basis. It was the sixth straight month of annual gains in for-sale properties and the highest since January of last year. With mortgage rates likely to moderate in coming months, further improvement in the supply side could be observed in the market for the rest of the year as the lock-in effect continues to ease.
  
  
• At the county level, the availability of homes for sale increased from a year ago in all but three counties in July. Yuba (75 percent) had the biggest year-over-year jump, followed by Calaveras (74.1 percent) and Alameda (71.7 percent). The only counties with a dip in homes for sale from last year were San Francisco (-18 percent), Glenn (-17.1 percent) and Trinity (-7.6 percent).
  
  
• New active listings at the state level increased from a year ago for the seventh consecutive month. With mortgage rates moderating throughout the month, the pace of growth accelerated in July (19.5 percent) after slowing to a single-digit growth rate in June. Forty-one of the 52 counties tracked by C.A.R. recorded an increase in new active listings from a year ago. Napa recorded the largest increase on a year-over-year basis at 62.3 percent, followed by Yuba (51.5 percent) and Solano (48.8 percent). Nine counties posted declines in new active listings from a year ago, with Trinity (-30.8 percent) dropping the sharpest, followed by Mariposa (-19.4 percent) and Kings (-10.1 percent).

• The median number of days it took to sell a California single-family home was 20 days in July and 16 days in July 2023.

• C.A.R.'s statewide sales-price-to-list-price ratio* was 100.0 percent in July 2024 and 100.0 percent in July 2023.
  
  
• The statewide average price per square foot** for an existing single-family home was $437, up from $408 in July a year ago.
  
  
• The 30-year, fixed-mortgage interest rate averaged 6.85 percent in July, up from 6.71 percent in July 2023, according to C.A.R.'s calculations based on Freddie Mac's weekly mortgage survey data.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS^® throughout the state and represent statistics of existing single-family detached homes only. County sales data is not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its original list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 53 counties.

Leading the way…® in California real estate for more than 118 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States with more than 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

# # #

July 2024 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

r = revised
NA = not available

July 2024 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

r = revised
NA = not available

Article belongs to CAR.org

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Realtors across the US are bracing for a seismic shift in the way they do business. Starting August 17, new rules will roll out that overhaul the way Realtors get paid to help people buy and sell their homes.

The changes, which are part of a $418 million settlement announced in March by the powerful trade group the National Association of Realtors, eliminate informal rules that propped up the industry's traditional payment structure, where home sellers were typically on the hook to pay a 5% or 6% commission, usually split between their agent and the agent representing their home seller.

In the months since the settlement was announced, Realtors across the country have been preparing for the change, attending trainings and poring over the details of new contracts they must sign with prospective homebuyers. Some agents predict the rules will pave the way for new business models and potentially drive many full-service Realtors to leave the industry, while others are more sanguine about the impending changes.

"This is a grand social experiment in an industry at scale," Leo Pareja, CEO of eXp Realty, one of the largest real estate brokerages in the US, said. "I'm bracing my agents for what I call the 'messy middle.' I fully expect a lot of confusion."

In a statement, NAR's president, Kevin Sears, said he was confident NAR members would adapt to the changes, which industry analysts have called the biggest change in America's real estate market in a century.

"These changes help to further empower consumers with clarity and choice when buying and selling a home," Sears said. As August 17 nears, "I am confident in our members' abilities to prepare for and embrace this evolution of our industry and help to guide consumers in the new landscape."

What's about to change?

Historically, a seller's agent charged homesellers a fee, often 5% or 6% of a home's purchase price, that was intended to be shared with the buyer's agent. That meant that homesellers could be on the hook for serious cash: A seller of a $1 million home might pay out $60,000 in commissions. Some experts have said that money was baked into homes' listing prices, inflating the price of homes for sale.

A series of lawsuits alleged this standard practice violated antitrust laws, though the NAR has long argued that the commissions were always negotiable.

Along with a monetary payout, the NAR agreed to two key rule changes as part of an agreement to settle the lawsuits. Both take effect on August 17 and are designed — in theory­ — to shake loose the standard way of paying out commissions.

Related articleShould you sell your home now or wait for the Realtor settlement this summer?

A judge granted preliminary approval of the NAR's settlement in April, but the final approval hearing is scheduled for November 26.

The first change prohibits agents' compensation from being included on multiple listing services, which are centralized databases used by Realtors to share details about homes for sale. Compensation details can still be advertised elsewhere or communicated in person or over the phone, though.

The second change requires buyers' agents to discuss their compensation upfront. Come August 17, agents working with a prospective homebuyer must now enter into a written buyer agreement before touring a property together. This agreement is designed to inform buyers that they are responsible for paying their own Realtors if a seller chooses not to cover the cost.

However, prior to the changes, Realtors in 18 states were already required to sign buyer agency agreements. Mary Schumann, a Realtor in Minnesota, said that to her, NAR's changes seem manageable.

"I always tend to wait and see how things shake out before I panic," Schumann said. "We already do buyers agreements here, and this doesn't seem to be incredibly different."

Newer business models see an opportunity

By some estimates, real estate commissions could fall between 25% to 50%, according to a March analysis by TD Cowen Insights. This could pave the way for real estate companies with alternative business models, like flat-fee and discount brokerages, to thrive.

Shelly Cofini, the chief strategy officer at Redy, said she believed the NAR settlement would benefit her company. Redy, which operates nationwide, is a marketplace that allows real estate agents to bid on home listings, meaning agents could pay homesellers for the opportunity to represent them, cutting into their own commissions.

Related articleThe housing market just reached an incredible milestone

"This is part of this notion of shifting how real estate is always done," Cofini said. "Because agents are in control of the proposal process, they decide on the cash incentive they'll offer and they decide on the commission structure they're willing to offer."

Companies are seeking to capitalize on the impending changes in other ways, too. Flyhomes operates as a traditional real estate brokerage, but earlier this summer, the company launched an AI chatbot designed to answer questions that a homebuyer might traditionally ask their Realtor.

"Consumers don't know this is coming," Flyhomes' chief strategy officer, Adam Hopson, said of the NAR changes. "When they decide they want to buy a home and they find they have to sign a contract, they may say, 'whoa, what is this?' We think this will drive them to find information from other sources. We will be one of those sources."

Will more Realtors call it quits?

Under the old standard, buyers often got representation for free, since their agent's commissions came from the homeseller's pocket.

Many Realtors who spoke to CNN said they believe the new set of rules will reward more experienced Realtors and shut out younger agents, since homebuyers may be wary of signing a legally binding agreement that ties them to a more inexperienced Realtor.

Related articleMortgage rates plunge to lowest level in more than a year

At 19, Madison Mathias, a Realtor in Chapin, South Carolina, said she has had to work overtime to dispel preconceived notions about her age to prospective clients, often re-reading contracts at night to ensure she has the details memorized.

Mathias said she thinks some Realtors will leave the industry, but she doesn't believe age will be a factor.

"I think more agents will fall off because some people don't like change," she said. "Being a new agent, I have had some people question me, but I've never had somebody not want to work with me because of my time in the business. It's all about confidence and educating yourself."

"I'm not really worried about it too much," she added.

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