The sharp rise in home prices in California over recent years is dissuading buyers and leading to a downward trend for sales.
California Association of Realtors has just reported its August sales data showing a fourth consecutive monthly decline. There were 399,600 home sales on a seasonally-adjusted annualized rate in August, down 1.8% from July and down 6.6% from August 2017.
Meanwhile, prices continue climbing, up 0.8% from July and 5.5% year-over-year, to a median $596,410.
"Home sales activity remained on a downward trend for the fourth straight month as uncertainty about the housing market continues to mount," said C.A.R. President Steve White. "Buyers are being cautious and reluctant to make a commitment as they are concerned that home prices may have peaked and instead are waiting until there's more clarity in the market."
On a regionwide, non-seasonally adjusted basis, Southern California led the state's sales decline, falling 8% from a year ago, San Diego sales were down 10.4%, while Orange and Los Angeles counties posted smaller declines of 9.7% and 8.9% respectively.
However, prices in Southern California continued higher suggesting demand has not disappeared.
The data also shows that there is already a slowdown in price growth as listings increase, putting pressure on sellers to reduce expectations.