California’s Metropolitan Areas Have Some of the Lowest Home Turnover Rates in the Nation.
California has seven of the nation’s 10 lowest home turnover rates, largely due to high home prices and owners with locked-in low-interest mortgages choosing to stay put.
Typically, relocations and life changes drive housing market activity, but this year, factors like elevated mortgage rates, rising home prices, and economic uncertainty have significantly slowed turnover, especially in California’s metro areas.
Redfin Senior Economist, Elijah de la Campa, notes that despite falling mortgage rates, the number of homes changing hands has not increased significantly, with stagnant demand for homes requiring additional work contributing to listings going stale.
Turnover rates across all property types have dropped nationwide, with condos and townhouses experiencing the largest declines, attributed to increased condo inventory and slowed sales due to rising HOA fees and insurance costs.
Redfin also reports a drop in homes listed for sale, reaching its lowest level since at least 2012, indicating a 30% decrease from pre-pandemic levels in 2019 and a 29% decline from the pandemic buying surge in 2021.
Lowest Rates
Seven of the 10 metro areas with the lowest turnover rates are in California, with Los Angeles recording the lowest rate where only 15 of every 1,000 homes were sold. Factors like Proposition 13 and high housing prices contribute to California’s low turnover rates.
Highest Rates
Cities near California and metro areas close to New York dominate the list of regions with the highest turnover rates, fueled by remote work opportunities and suburban living appeal near major cities. Phoenix leads the list with the highest turnover rate.
Reasons
Several factors drive low turnover rates, including rising mortgage rates, high home prices, and economic and political uncertainty. Record high home prices and limited inventory continue to impact the housing market, along with buyer hesitation related to election outcomes.
