The statewide median price remained above $800,000 for the third straight month, as tight supply continued to provide upward support

June home sales came in below the 300,000-benchmark for the ninth consecutive month, as rates remained elevated in the past couple of months. The year-over-year decline, however, moderated further with the annual dip dropping below 20% for the first time in 12 months. Meanwhile, the statewide median price remained above $800,000 for the third straight month, as tight supply continued to provide upward support. Monthly price dips in the coming months are anticipated, however, as the market goes through its typical seasonal pattern and rates remain elevated for most if not the entire third quarter. As for the economy, consumers appear to be more resilient than predicted six months ago, and economists are lowering the odds of a recession for the U.S. That’s good news, except a solid economy could mean a delay in the Fed loosening its monetary policy, which could be translated as mortgage rates staying high for a little longer.

Elevated rates and limited supply continue to suppress California home sales: Sales of existing homes in California continued to decline on a year-over-year basis for the 24th straight month in June but registered the smallest yearly drop since May 2022. Short supply and high mortgage rates continued to suppress home sales, while heated market competition remained the driving force that put upward pressure on home prices. As the market moves closer and closer to the end of the home buying season, the statewide median price is near its peak and will level off in July or August. If interest rates start coming down in the next couple of months, the market will see some improvement in affordability, which could help push sales up in the second half of the year.

Supply remains stuck and may not improve any time soon: Housing inventory in California inched up in June from the prior month but dipped again from the same month of last year, as tight supply continued to be the norm. The statewide unsold inventory index in June 2023 dropped 8.3% from a year ago and increased 4.8% on a month-over-month basis. Active listings at the state level fell sharply by 34% from last year and registered the largest year-over-year decline since May 2021. With mortgage rates expected to be high in the next couple of months, California may not see any meaningful improvement in its supply condition for the rest of the third quarter.

Retail sales continue to climb but at a slower pace: Consumers continued to spend in June and pushed up retail sales activity for the third straight month. The pace of growth in the latest month was softer than that observed in May and April, which suggests a stalling in momentum on consumer spending despite easing inflation. After accounted for price growth adjustment, real retail sales were up 0.1% from May and were up 2.4% from June 2022. While the overall growth was slowing, ecommerce remained a bright spot, topping all categories with a gain of 9.4% on a year-over-year basis. With Amazon claiming the first 24 hour of its Prime Day promotion in July as the “single largest sales day in the company history”, next month’s report could be even more impressive for ecommerce, and could help maintain a positive month-to-month growth rate for retail sales overall.

Single-Family rent growth back to pre-pandemic levels: U.S. single-family rent continued to grow year-over-year in May with a gain of 3.4% from last year. The annual increase, however, continued to slow and was back to the rate recorded in the decade before the pandemic. The decelerating trend in rent growth is consistent with the pattern shown in the June’s consumer price index report, where shelter inflation also began to show signs of easing. The mid-single digit increase on rent was a relief for many renters who had to pay a double-digit growth rate on rent in May 2022. At the national level, rent growth for the lowest price tier was more than double that of the highest price tier, which suggest a bigger imbalance between supply and demand in the more affordable segment. Rent growth has been slowing throughout the year and could see further softening before the end of the year, as more multifamily supply continues to come on board.

Builders remain confident as residential construction falls back: Residential construction took a step back last month, with total housing starts falling 8% during June, partially offsetting the robust gain in May. The sizable drop was broad-based with single-family dipping 7.0% from May to June, while multi-family sliding 9.9% over the same period. Despite a pullback in starts, the outlook for single-family constructions remained positive, as single-family permits continued to rise modestly by 2.2% on a month-over-month basis. With solid demand and a lack of supply in the resale market, developers continue to shift their focus to single-family housing units. Builder confidence remained on the rise for the seventh straight month, with the NAHB/Wells Fargo Housing Market Index gaining 25 points since the December 2022 low.

If you have any real estate questions or would like to discuss if now is a good time to buy or sell, please feel free to contact me.

Looking To Move Out Of State?

Save Thousands for Dollars With Our

Relocation Program

As a top agent with the #1 brokerage in North America, I have relationships with some of the top agents all over the country. I have recently helped some clients move to Tennessee, Arizona, Nevada, Montana, Texas, Florida, and other states with the help of my KW Relocation network of local experts to help them find their next dream home. My network of agents saved them thousands of dollars and reduced the time and hassle of finding a new home in another state.

If you or someone you know is looking to relocate to a new city or state, contact me to tap into the power of my network of experienced agents throughout North America.

SEARCH HOMES FOR SALE

HOME SEARCH

APP

WHAT'S MY HOME WORTH?

For Sale

781 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 2,067 SF | $1,200,000

Stunning 3-bed, 2-bath home with breathtaking ocean views in Coastal San Pedro. Experience the beauty of the ocean from the front yard, primary bedroom, and the expansive backyard. Situated on a generous 9,576 SF lot, there's plenty of space to potentially add an ADU.

OPEN HOUSE

SATURDAY & SUNDAY 1 - 4PM

807 Delaware St

Huntington Beach 92648

4 Bed | 5 Bath | 3,237 SF | $2,950,000

Tesoro Builders has created another extraordinary opportunity to own a brand new, custom designed single-family home in the heart of highly coveted downtown Huntington Beach. The epitome luxury living offers an exceptional beach lifestyle. Starting at $2,950,000, based on options and interest.

For Rent

6 N Alboni Pl #4

Long Beach 90802

2 Bed | 2 Bath | 1,161 SF | $3,500

Experience coastal luxury in this fully furnished 2-bed, 2-bath condo just steps away from the beach! As you step inside, you'll be greeted by the elegance of a baby grand piano and modern décor and furnishings. The property offers flexible leasing options, with a minimum 6-month lease available. Live the beachside lifestyle you've always dreamed of with this exquisite condo.

525 E Seaside Way #402

Long Beach 90802

1 Bed | 1 Bath | 622 SF | $2,650

Beautiful luxury high-rise condo at Harbor Place Tower in the heart of downtown Long Beach. Walking distance to the beach, Aquarium, convention center, the Pike, Pine Ave restaurants, nightlife and so much more!

In Escrow

773 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 1,040 SF | $875,000

Enjoy beautiful ocean and harbor views from the front yard, living room, and the expansive backyard. This 3-bed, 2-bath home offers even more possibilities with an additional enclosed patio area currently staged as a family room and game room. The spacious 8,904 SF lot provides ample room for expansion, including the possible potential to add an ADU.

1007 Catalina Ave #108

Redondo Beach 90277

2 Bed | 2 Bath | 1,181 SF | $1,200,000

Welcome to Your Dream Beach Home! A Stunning 2 story, 2 bedroom, 2 bath condo located half a block to the beach. Beautifully updated throughout with dramatic high ceilings, gorgeous kitchen, and an abundance of natural light and open space.

Recently Sold

985 S. Idaho Ave. #60

La Habra 90631

2 Bed+Den | 2 Bath | 1,073 SF | $505,000

This 2 bedroom plus a den (currently being used as a 3rd bedroom) is tucked away in a peaceful serene location surrounded by beautiful trees in the Woodlake Villas of La Habra.

211 Saint Joseph

Long Beach 90803

3 Bed | 2 Bath | 1,057 SF | $1,299,000

Welcome to this charming Belmont Shore home located just 4 blocks to the beach! Enjoy the open concept floor plan, granite countertops, hardwood flooring, and a serene primary suite with a spa-like bathroom. Don't miss this opportunity for coastal living at its finest!

5528 Pearce Ave.

Lakewood 90712

3 Bed | 2 Bath | 1,592 SF | $845,000

The "Honey Due" list has already been done for you; all you have to do is move in and start enjoying this 3-bedroom 2 bath Lakewood home. Open concept kitchen with newer cabinets, stainless steel appliances and granite countertops.

256 Hermosa Ave

Long Beach 90802

2 Bed | 1 Bath | 780 SF | $475,000

Nicely updated 2 bedroom condo in Alamitos Beach, close to Bluff Park, and just a short walk to the beach, Bixby Park, cafes, nightlife, and great restaurants.