Pixel Tracker

Tuesday, December 18 , 2018, 6:11 am | Fair 44º

 
 
 
 
Real Estate

Alec Bruice: California Housing Market Maintains Momentum Despite Tight Supply

California existing home sales edged up in May, rising above the 400,000 benchmark level for the third straight month, while strained housing supply continued to push prices higher, the California Association of Realtors reported last week.   

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 410,090 units in May, 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 2016 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The May figure was up a slight 0.6 percent from the revised 407,560 level in April and down 3.2 percent compared with home sales in May 2015 of a revised 423,700. The year-to-year decline was the first back-to-back sales decline since November 2014.

“While May home sales edged up slightly, we are seeing a moderation, driven by tight housing inventory and reduced affordability,” said C.A.R. President Pat “Ziggy” Zicarelli. “Affordable areas, such as the Inland Empire and Central Valley, where housing supply is relatively more abundant, are outperforming the San Francisco Bay Area, where thin housing availability is hampering home sales. In fact, eight of that region’s nine counties experienced a sales decline from the previous year.”

A change in the mix of sales and a continued mismatch between supply and demand pushed the median price of an existing, single-family detached California home 1.8 percent higher in May to $518,760 from $509,590 in April.

May’s median price was 6.3 percent higher than the revised $487,960 recorded in May 2015. 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.

May marked the second consecutive month that the median price was above $500,000, although it is still below the pre-recession peak of $594,530 reached in May 2007.

“The California housing market is growing modestly so far this year, with home sales running 2 percent higher year to date,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Fundamental drivers, such as household formation and economic growth will continue to move housing demand forward. However, constrained inventory, low affordability and regional disparities will be a drag on this year’s market outlook, which is forecast to see a 1.3 percent growth in sales and a 5 percent increase in the median home price.”

Other key points from C.A.R.’s May 2016 resale housing report include the following:

» C.A.R.’s unsold inventory index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate, dipped slightly to 3.4 months in May from 3.5 months in April. The index stood at 3.5 months in May 2015. The year-over-year dip was due primarily to a drop in inventory as overall active listings increased 5.8 percent from April 2016. The long-run average home supply is 6.1 months, indicating inventory levels are running at roughly 60 percent of normal.

» The median number of days it took to sell a single-family home slipped in May to 27.3 days, compared with 27.7 days in April and 27.9 days in May 2015.

» According to C.A.R.’s sales-to-list price ratio, tight inventories also appear to be driving final sales prices closer to listing prices, with sales prices rising to 99.7 percent of listing prices statewide in May from 99.3 percent in April.

» The average price per square foot for an existing, single-family home statewide was $249 in May 2016, up from $244 in April and $238 in May 2015. 

» San Francisco County had the highest price per square foot in May at $856/sq. ft., followed by San Mateo ($826/sq. ft.) and Santa Clara counties ($638/sq. ft.). The counties with the lowest price per square foot in May include Siskiyou ($121/sq. ft.), Madera ($123/sq. ft.) and Plumas ($125/sq. ft.). 

» Mortgage rates were essentially flat in May, with the 30-year, fixed-mortgage interest rate averaging 3.60 percent, compared with 3.61 percent in April and 3.84 percent in May 2015, according to Freddie Mac. Adjustable-mortgage interest rates slipped, averaging 2.81 percent in May, down from 2.83 percent in April and 2.89 percent in May 2015.

*Taken from the California Association of Realtors.

Alec Bruice is a licensed real estate broker with Santa Barbara Brokers and the 2016 president of the Santa Barbara Association of Realtors. Contact him at [email protected] or 805.637.5774. The opinions expressed are his own.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made using a credit card, Apple Pay or Google Pay, or click here for information on recurring credit-card payments and a mailing address for checks.

Thank you for your vital support.

Become a Noozhawk Supporter

First name
Last name
Email
Select your monthly membership
Or choose an annual membership
×

Payment Information

Membership Subscription

You are enrolling in . Thank you for joining the Hawks Club.

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover
One click only, please!

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.
You may cancel your membership at any time by sending an email to .(JavaScript must be enabled to view this email address).

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >

Meet Your Realtor Sponsored by Village Properties

Photo of Patricia Griffin
Patricia Griffin
"I am very hands on and feel that each transaction is special and different. My clients goals are foremost in what I do to bring about a successful transaction."

Full Profile >