CALIFORNIA—The California housing market is expected to see a decrease after home sales dropped significantly in October and November in 2016 compared to 2015, the California Association of Realtors said on Thursday, December 29.
Pending home sales were down 7.9 percent from November 2015 sales. California’s statewide sales were down 3.5 percent.
The homes selling for below asking price rose 40 percent in 2016 compared to 2015. Of those 44 percent of homes, they sold for an average of 11 percent below the asking price, which is down 13 percent from a year ago.
The share of properties selling above asking price dropped to 25 percent from 27 percent in November 2015. The remaining 31 percent sold at asking price, down from 33 percent in November 2015, according to the report. About a third of properties listed had price reductions in November 2016.
The top concern for a slowing market is due to rising interest rates, the report noted, with triple the number of realtors who were concerned about higher rates than in October. High home prices and housing affordability concerned 39 percent of realtors, while a lack of available homes for sale were a concern for 26 percent of realtors. Realtors were also concerned about a slowdown in economic growth, lending and financing and policy and regulations.
“REALTORS® expectation of market conditions over the next year has been trending downward for the past few months, but is still in positive territory,” the Los-Angeles based CAR stated.