An Update on California Housing Market Trends for Summer 2022

• An updated California housing market trends report came out this week.
• It showed a year-over-year decline in the number of home sales statewide.
• It also showed that it’s taking longer to sell a house these days, on average.
• California home buyers could benefit from a cooler market in 2022 – 2023.

A new report from the state’s Realtor association shed some light on the latest housing market trends for California, as of summer 2022. Among other things, this report showed that demand among home buyers has declined during 2022. Higher housing costs contributed to the decline.

These trends could actually benefit those buyers who still plan to make a purchase in 2022.

California Housing Market Trends for Summer 2022

On July 18, the California Association of REALTORS^® (C.A.R.) published an updated real estate market report with data through the end of June 2022. This report showed that the California housing market continues to cool down, with a decline in home sales compared to a year ago.

This could be seen as good news from a home buyer’s perspective. Among other things, it means those who plan to buy a home in California later in 2022 (or in 2023) could encounter less competition from other buyers.

According to the C.A.R. market trends report, 344,970 single-family homes were sold during the month of June 2022. That marked a decline of 8.4% from the previous month, and a whopping 21% decline from a year ago. These trends and statistics show that the real estate scene continues to cool from the frenzied pace seen in 2021.

“California’s housing market continued to downshift in June,” the report stated, “as housing demand cooled further to levels not seen in the past two years and logged its biggest dip since May 2020.”

Despite a slight month-to-month dip, home prices were still higher in June 2022 compared to a year earlier. Last month, the statewide median home price was $863,790, up 5.4% percent when compared to June of 2021.

Homes Are Staying on the Market Longer

The latest California housing market trends report also showed that it’s taking longer to sell a home these days, compared to last year. And that’s understandable, given the higher cost of housing and inventory growth we’ve seen in recent months.

According to C.A.R.’s data, the median number of days it took to sell a single-family home rose to 11 days in June 2022, up from 8 days in June of last year. That’s still a fairly low median “time on market,” which means the California real estate market is still chugging along. But things have slowed a bit from last year.

There has also been an increase in the number of price reductions in real estate markets across the state. So it seems that sellers are starting to feel some pressure, when it comes to pricing their homes for the market.

A Golden Opportunity for Buyers?

You might read all of these reports about the California real estate market slowing down and think it’s a bad thing. But that’s not the case here. What we’re seeing is a slow-but-steady shift toward a more “normal” real estate market, after two years of overheated conditions.

Home buyers in California can actually benefit from this downshift. During the second half of 2020, and through all of 2021, the real estate market accelerated to a breakneck page. Home buyers found themselves competing fiercely with one another, often in bidding-war type scenarios.

Today, however, the real estate market favors buyers a little more than it did a year ago. More and more homes have come onto the market, giving house hunters more properties to choose from. And the overall pace of real estate transactions has slowed, allowing buyers to catch their breath.

According to C.A.R. president Otto Catrina:

“California’s housing market continues to moderate from the frenzied levels seen in the past two years, which is creating favorable conditions for buyers who lost offers or sat out during the fiercely competitive market.”

The Inventory Situation Continues to Improve

For the past 18 months or so, housing market inventory levels in California hovered at or near record lows. Supply shortages created additional challenges for home buyers, by boosting competition and accelerating the overall pace of the real estate market.

But we’re starting to see steady improvements on this front.

In June, the statewide “unsold inventory index” rose to its highest level in two years. Total active real estate listings in California increased by 64% in June. That was the largest year-over-year gain in more than seven years, according to C.A.R.