San Diego sales much lower in January, while prices barely rise
Even though the U.S. economy was robust, unemployment was low, and wages grew, home sales across the nation began to drop late last year. Reasons given were high prices and a number of interest rate hikes by the Federal Reserve.
Higher rates made houses less affordable, so the Fed took a “patient approach” to further rate changes, and not increase rates during January 2019.
This from the San Diego Association of Realtors for January:
“Closed Sales decreased 13.3 percent for Detached homes and 26.2 percent for Attached homes. Pending Sales decreased 2.6 percent for Detached homes and 5.8 percent for Attached homes. Inventory increased 28.3 percent for Detached homes and 45.2 percent for Attached homes.
The Median Sales Price was up 3.4 percent to $615,000 for Detached homes and 2.5 percent to $415,000 for Attached homes. Days on Market increased 13.5 percent for Detached homes and 28.6 percent for Attached homes. Supply increased 41.2 percent for Detached homes and 61.5 percent for Attached homes.”
So, the number of sales in January plunged, while the number of listings increased. And how long the listings were on the market increased as well.
What that means is, there are now more homes for sale than in the past, making it a more buyer friendly environment. More inventory means lower prices, so more buyers will qualify.
If home prices increase about as fast as wages do, and the Fed keeps being patient with interest rates, homes will be more affordable, and home buyers can more confident about buying a home.