“This is the new normal,” said California Association of Realtors vice president and chief economist Leslie Appleton-Young as she presented the association’s 2017 housing market forecast today. According to the forecast, 2016 existing-home sales were strong at the beginning of the year but quickly slowed due to tight inventory and skyrocketing median existing-home sales prices, which blew past the last cyclical price peaks by as many as 38.9 percentage points in some regions.
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Despite remaining above the 400,000 home sales mark for four consecutive months, California is selling less homes than forecasted.
If the National Association of Realtors Confidence Index survey is taken face value, Realtors could see the market as getting stronger — but one may draw a more tempered conclusion after reading further into the report.
Although buyer competition is softening across major California markets, statewide pending sales data reveals heightened activity in Southern California. On a seasonally adjusted annualized basis, the California Association of Realtors Pending Home Sales Index (PHSI) rose 3.5 percent between July 2015 and July 2016.
Last month, growing home sales were finally slowed down by tight inventory — an issue that has been at the forefront of the housing market conversation since the beginning of the year. And, according to the National Association of Realtors’ latest existing-home sales report, it seems that slowing home sales will be the name of the game for some time to come.