by Calculated Risk on 3/16/2021 11:34:00 AM

The CAR reported: California home sales and prices ease but strong buying interest continues to provide support to the market as sales record eighth straight year-over-year gain, C.A.R. reports

California home sales moderated in February as mortgage rates spiked in recent weeks, while tight housing supply continued to constrain demand, especially in more affordable markets, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 462,720 in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2021 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

February home sales decreased 4.5 percent from 484,760 in January and were up 9.7 percent from a year ago, when 421,670 homes were sold on an annualized basis. While still solid, the nearly 10 percent sales increase was the smallest gain in the past seven months.
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“The housing market has been cruising at a robust pace since the second half of 2020 but has encountered some speedbumps recently as rates began to rise,” said C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “While higher rates may slow growth in home sales temporarily, the major roadblock in the long run is a shortage of homes for sale. With inventory dropping more than a half from a year ago, the market will soften in the second half of 2021 if we don’t see enough homes come on the market to meet demand.”
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The Unsold Inventory Index (UII) inched up from 1.9 months in January to 2.0 months in February but dropped sharply from a year ago, when there was 3.6 months of housing inventory. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.

Active listings fell 52.5 percent in February from last year and continued to drop more than 40 percent on a year-over-year basis for the eighth consecutive month. On a month-to-month basis, for-sale properties inched up slightly by 0.4 percent in February and should climb further in the coming months as the market prepares for the spring homebuying season and the pandemic situation continues to improve.
emphasis added

CR Note: Existing home sales are reported when the transaction closes, so this was mostly for contracts signed in December and January.