Home sales can be a good indicator of the health of the state’s economy and housing markets. Home sales have been somewhat sluggish since the summer of 2018, and this trend appeared to continue in January with a preliminary estimate of 27,400 non-distressed (not resulting from mortgage delinquency or foreclosure) statewide home sales. This estimate is subject to revision, which will likely be upward if recent trends hold: The initial November estimate has been revised upward from 25,700 to 26,600, and December from 26,500 to 26,900. In any case, home sales activity is significantly weaker now than it was from late 2016 to early 2018, when the monthly total was regularly near or above 30,000.
This next graph compares the most recent three months with the same months in the previous year. The year over year growth rate (4.1 percent) is as high as it has been since 2017, but this is mainly because the period from November 2018 to January 2019 was the weakest three-month stretch since 2011. Unless sales pick up sharply, the growth rate is likely to decline going forward.
Date sources: Zillow, California Association of Realtors, and Moody’s Analytics, with LAO calculations.