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Homes Sales and Prices in California May Have Hit an Affordability Tipping Point

It may be that California, where home prices have exploded over the last few years, has jumped the shark when it comes to affordability. CoreLogic's Andrew LePage writes in the company's Insights blog that September home sales in the state were the lowest in the country since September2007.

The sales report comes in the wake of reports from several sources showing an abrupt slowdown in home price growth in many of the state's largest metros. CoreLogic says the state's annual gain of 4.1 percent in the median home price statewide was the lowest in more than two years. Coupled with higher mortgages rates, the lack of affordability appears to, in LePage's words, have knocked some would-be buyers to the sidelines, unable or unwilling to buy.

Sales do historically fade in September as school starts, and inventories typically shrink. This September there were 33,886 homes sold statewide, a 21.9 percent decline from August sales. The average change from August to September since 2000 has been 9.9 percent. September's sales were down 17.2 percent from September 2017, the largest annual rollback since a 23.3 percent negative change in October 2010. Sales have fallen on an annual basis in four of the last five months. The fifth month, July, saw an annual increase of only 1.2 percent.

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