The number of homes sold in California in November dropped to the lowest level since the Great Recession in the early 2000s, according to a new report from the California Association of Realtors. Statewide, the number of single-family homes sold last month fell to 223,940, a 7.4% drop from October and a 5.8% drop compared to the same time last year. The statewide median home price dropped 2.2% from October but was up 6.2% from November 2022.

The California Association of Realtors attributes the drop in sales to higher borrowing costs, along with high interest rates and a limited supply of homes for sale. “Elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November,” Melanie Barker. president of the association, said. Help sustain the local news you depend on.

Your contribution matters. Become a member today. “With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could re-enter the market early next year,” she said. In San Mateo County, November home sales were up 10.2% year-over-year and down 5% from October. The November median home price of $1,805,000, was 1.3% higher than $1,782,500 a year ago and 14% less than $2,100,000 in October. In Santa Clara County, home sales in November were 3.2% higher than last year and down 16.3% from October.

The November median sales price for a single-family home was $1,717,500, up 7.3% from $1,600,000 in November 2022 and 4.8% lower than $1,805,000 in October. “Though prices are relatively strong, and buyers are still paying over list price for most homes in both counties, we expect the market to continue soften in December, since it is traditionally a slow month due to the holidays.

We also expect we’ll be going into the new year with fewer listings,” Jim Hamilton, president of the Silicon Valley Association of Realtors, said. Jordan Levine, senior vice president and chief economist of the association, said while sales have been weak for the past several months, a tight supply of homes for sale is keeping home prices from falling. “Going into 2024, the recent decline in mortgage rates, along with the upward momentum in home prices, could motivate more would-be sellers to list their homes for sale in the spring homebuying season.”

Levine, who was a guest speaker at the local trade association’s recent general membership meeting, told Silicon Valley Realtors that he expects the housing market to improve slowly due to better mortgage interest rates. Housing affordability problems, however, will continue due to high home prices. He indicated sales will continue to be a limiting factor due to the low housing supply and hyper-low interest rates that homeowners already have. “We are going to be doing a little better than what the (Federal Reserve) would like to believe.

It will not be 2008 all over again,” Levine said. He said consumers sitting on sidelines are “misguided” if they expect interest rates to come down much. That 2%-3% mortgage interest rate is unlikely to happen again for a long time, if ever. Waiting is “wishful thinking” and even if rates come down, it won’t save them money. They would not get the equity they would have received had they bought a home sooner, and they would have to contend with stiffer competition and multiple offers, he said. Sellers, on the other hand, need to be more strategic and manage their expectations.

While transactions above $1 million are still pretty high, there is less buyer demand at every price point due to the higher mortgage rates. “Tight inventory is the name of the game,” Levine said. Two-thirds of homeowners have minimal motivation to move because they are locked in low rates. Then there is that one-third of the market with mortgages that are above the 4% interest rate.

Foreclosures are unlikely. Levine explained that unlike the Great Recession, most homeowners today have a lot of equity — 95% have at least 20% equity in their homes and nearly 90% of homeowners have at least 30% equity. “The data can be your friend,” Levine told members. “The benefits of homeownership are well-documented. It’s about long-term benefits. You don’t get better off (by) not owning a home.”

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WASHINGTON (AP) — U.S. employers posted fewer jobs in June, a sign that the red-hot demand for workers that has been a key feature of the post-pandemic economy is cooling a bit.

Job openings dropped to 9.6 million in June, the Labor Department said Tuesday, down slightly from the previous month but much lower than the 10.3 million in April and the fewest in more than two years. The government’s report also showed that the number of people who quit their jobs in June fell sharply to 3.8 million, from 4.1 million, another sign the job market is slowing.

The Federal Reserve is seeking to cool hiring because if companies are less desperate to add workers, and fewer people are quitting to seek higher-paying positions elsewhere, then businesses will be under less pressure to raise pay to find and keep workers. Smaller pay hikes could help lower inflation, since businesses won’t have to lift their prices to offset higher labor costs.

Tuesday’s report means there are 1.6 jobs for every unemployed worker, down from a peak of 1.9 earlier this year. But that is still much higher than before the pandemic. Since the economy first emerged from the pandemic, job openings have soared — reaching a record 12 million in March 2022. Before the pandemic, they had never topped 7.6 million.

Overall, Tuesday’s report, known as the Job Openings and Labor Turnover Survey, or JOLTs, still paints a picture of a healthy economy, with employers seeking to hire more people. The number of workers quitting is still slightly above pre-pandemic levels, suggesting that many Americans continue to find better-paying opportunities at new jobs.

At the same time, the data suggests that the labor market is slowly normalizing from the post-pandemic extremes.

“There are fewer signs that there is true desperation among employers,” said Nick Bunker, research director at Indeed Hiring Lab, a online jobs site. “Wage growth is coming down.”

Fewer employers are offering signing bonuses in their job postings, Bunker said, though such bonuses ares still much more likely than before COVID struck.

On Friday, the government is set to release the July jobs report, which will show how many positions were added in July and whether the unemployment rate fell below its current level of 3.6%, which is near the lowest in a half-century. Economists forecast the report will show a gain of 200,000 jobs, with the unemployment rate unchanged, according to a survey by data provider FactSet.

Average paychecks rose by 4.6% in the April-June quarter compared to a year earlier, above the pre-pandemic pace of about 3%. While that’s great for workers, the Fed worries that unless companies become more productive, such increases are too high to get inflation to its 2% target.

The Fed last week lifted its key short-term rate for the 11th time in 17 months as part of its ongoing efforts to curb inflation, which is currently at 3%. Excluding the volatile food and energy categories, however, according to the Fed’s preferred measure, it rose 4.1% compared with a year ago.

Most economists would have expected such a sharp increase in interest rates to force widespread layoffs and higher unemployment. Instead, the unemployment rate has barely changed since the Fed began pushing up borrowing costs last year.

Fed Chair Jerome Powell has long held out hope that the higher rates, instead of leading to more layoffs, would simply cause employers to post fewer openings.

At a press conference last week, Powell said that the job market has “softened,” which should help bring down inflation, “through job openings coming down part of the way back to more normal levels.”

Typically, when job openings decline, companies also start to lay off workers and push up the unemployment rate. But so far, that’s not happening. Tuesday’s report, known as the Job Openings and Labor Turnover Survey, showed that layoffs actually declined in June, to 1.53 million, down from 1.57 million in May. That is below pre-pandemic trends and suggests companies generally want to hold onto their staffs.

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