California Real Estate Sees a Jump

Amid the lowest housing inventory levels of the year, existing home sales in California took off in June to their highest pace in nearly four years as existing home sales and median home price recorded strong gains on both a monthly and annual basis for the second straight month, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said  today.

Closed escrow sales of existing, single-family detached homes in California not only remained above the 400,000 benchmark for the 15th consecutive month, they totaled a seasonally adjusted annualized rate of 443,150 units in June, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The June figure was up 3.3 percent from the revised 428,890 level in May and up 2.4 percent compared with home sales in June 2016 of a revised 432,880. Year-to-date sales are running 3.2 percent ahead of last year’s  pace.

“A lack of available homes for sale continues to be the largest single factor influencing California’s housing market,” said C.A.R. President Geoff McIntosh. “With active listings 13.5 percent lower than last June, we’ve now experienced a full two years in which active listings have fallen on a year-over-year basis and the lowest inventory level this year. Would-be sellers aren’t listing their homes as many of them would also face an inventory challenge if they were to turn around and buy another  property.”

The statewide median price remained above the $500,000 mark for the fourth straight month and reached the highest level since August 2007. The median price was up 0.9 percent from a revised $550,080 in May to reach $555,150 in June, and was 7.0 percent higher than the revised $518,830 recorded in June 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in  values.

“While June home sales improved at a healthy pace, the growth in sales was primarily in the mid- to higher-end price ranges. In fact, sales in the lower price ranges were down significantly as a tight supply of affordable homes continues to plague the market and impede the sales of starter homes,” C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “This factor has disproportionately pushed prices higher at the lower end of the market, leading to eroding affordability that either prevents or delays first-time buyers from getting on the housing  ladder.”

Other key points from C.A.R.’s June 2017 resale housing report  include:

• The June sales increase was wide reaching as every major region in the state posted an increase over the previous month and year. The Inland Empire experienced the largest year-over-year sales gain with a 10.4 percent increase in existing home sales from last June, followed by an increase of 8.3 percent in the Los Angeles Metro Area, and a 6.1 percent rise in the San Francisco Bay Area.
• New statewide active listings have declined for a full two years straight in June, falling 13.5 percent from a year ago.
• The increase in sales, coupled with the double-digit decline in active listings, lowered June’s available housing supply. C.A.R.’s Unsold Inventory Index fell from 2.9 months in May to 2.7 months in June. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 3.2 months in June 2016.
• At the county level, 39 of 51 reported counties experienced a drop in the unsold inventory index compared to a year ago. San Mateo (1.3 months), Santa Clara (1.4 months), and Alameda (1.6 months) counties had the lowest inventory, followed by San Francisco (1.7 months) and Contra Costa (1.9 months) counties.
• The median number of days it took to sell a single-family home was unchanged from May at 22.4 days but was down from 27.1 days in June 2016.
• C.A.R.’s sales-to-list price ratio* was 100 percent of listing prices statewide in June, 100 percent in May, and 99.5 percent in June 2016.
• The average price per square foot** for an existing, single-family home statewide was $270 in June, $267 in May, and $252 in June 2016.
• San Francisco County had the highest price per square foot in June at $909/sq. ft., followed by San Mateo ($848/sq. ft.), and Santa Clara ($662/sq. ft.). Counties with the lowest price per square foot in June included Del Norte ($114/sq. ft.), Lassen ($131/sq. ft.), and Siskiyou ($133/sq. ft.).
• Mortgage rates continued to dip further since the beginning of the year. The 30-year, fixed-mortgage interest rate averaged 3.90 percent in June, down from 4.01 percent in May but up from 3.57 percent in June 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates edged up in June to an average of 3.14 percent from 3.12 percent in May but was up from 2.78 percent in June 2016.

Graphics (click links to  open):

• Calif. home sales highest in four years.
• Calif. median home price highest since 2007.
• Sales at lower end impacted by low inventory.
• Calif. price per square foot highest since 2007.
• Calif. sales to list price ratio.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales.  Movements in sales prices should not be interpreted as changes in the cost of a standard home.  The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold.  The change in median prices should not be construed as actual price changes in specific  homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage.  A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking  price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property.  It is calculated as the sale price of the home divided by the number of finished square feet.  C.A.R. currently tracks price-per-square foot statistics for 39  counties.

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Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los  Angeles.

SOURCE CALIFORNIA ASSOCIATION OF  REALTORS