Home sales fall again in January

Bay Area houses selling below asking price

The nation's housing slump dragged on into January as home sales fell for the 12th consecutive month to the slowest pace in more than a dozen years.

The National Association of Realtors said Tuesday that existing U.S. home sales fell to a seasonally adjusted annual rate of 4 million properties last month. That's the slowest annual pace since October 2010, when the housing market was still reeling from the 2008 foreclosure crisis.

January's sales cratered by nearly 37% from a year earlier and slipped 0.7% from December. Economists had projected a modest monthly rise in sales, according to FactSet.

The median U.S. home price edged up 1.3% from January last year to $359,000. That's the slowest annual increase in home prices since February 2012. The median home price is down around 13% since it peaked in June last year.

In the Bay Area, homes are selling, on average, for less than the asking prices for the first time in over a decade, according to data from real estate brokerage Redfin.

Across the core Bay Area, the sales-to-list ratio has remained between 98% and 100% over the past three months. That means sales prices hovered around 1% to 2% below asking prices on average during that period. It's the first time that's happened since early 2012 when Redfin began tracking the data.

Just a year ago, in May 2022, as home prices peaked at record highs, the sales-to-list ratio reached 114% in the San Jose metro area, 112% in the Oakland metro and 111% in the San Francisco metro.

The modest monthly sales drop and small increase in national home prices suggests the housing market downturn may be nearing an end, said Lawrence Yun, the NAR's chief economist.

“We have to wait until things develop, but perhaps home sales are bottoming out right now,” he said.

The path to homeownership was still largely unsur

mountable for many Americans in January, as mortgage rates eased from their November highs, but remained roughly double what they were a year earlier. As rates rise, they can add hundreds of dollars to monthly mortgage payments.

Consider, the monthly mortgage payment on a typical U.S. starter home priced at $321,900, after factoring in a 10% down payment, was $1,931 in the fourth quarter, or 57% higher than a year earlier, according to data from the NAR.

Still, some market trends have begun shifting in buyers' favor. The number of homes for sale remains tight by historical standards, but increased 2.1% in January from the previous month to 980,000 properties, snapping a five-month skid, and was up 15.3% from January last year,

the NAR said.

That amounts to a 2.9-month supply at the current sales pace, up from 1.6% in January last year. In a more balanced market between buyers and sellers, there is a 5to 6-month supply.

“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun said. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”

While home prices rose overall, they fell in roughly half the country last month, Yun noted.

On average, homes sold in 33 days of hitting the market in January. That's up from 26 days in December and 19 days in January last year. The increase reflects more properties sitting on the market longer, though more than half of all homes sold last month were snapped up in less than a month of being put up for sale, the NAR said.