California Home Sales, Prices Start 2015 Lower
According to the California Association of Realtors (C.A.R.), California's housing market started the new year still bearing the scars of 2014's tight housing inventory and low housing affordability as statewide home sales fell from the previous month and year.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 351,890 units in January, according to information collected by C.A.R. Sales in January were down 3.9 percent from a revised 366,130 in December and down 2.7 percent from a revised 361,790 in January 2014. Home sales have been below the 400,000 level since November 2013. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
"Despite a leveling off of home prices and continued decline in interest rates in recent months, California's housing market continues to be constrained by low housing affordability, particularly in the San Francisco Bay Area," said C.A.R. President Chris Kutzkey. "Due to the region's strong income and job growth, the Bay Area was the least affected by the housing crisis. But strong housing demand and tight supply in the region also have caused home prices to appreciate at a faster rate than many regions in California, leading to a slide in housing affordability in the area, which in turn, has resulted in a more pronounced slowdown in market activity in recent months."
The median price of an existing, single-family detached California home fell 5.9 percent from December's median price of $453,780 to $426,790 in January but was up 3.4 percent from the revised $412,820 recorded in January 2014. The statewide median home price has been higher on a year-over-year basis for more than two years, but price gains have narrowed significantly in the past year. 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 the statewide unsold inventory index in January jumped to the highest level in nearly three years, the increase can be attributed in large part due to the drop in sales," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Overall, active listings statewide showed a near double-digit increase from last January, but supply conditions weren't all positive at the regional level. While both the Southern California and Central Valley regions showed a clear improvement in their inventory levels when compared to last year, housing supply in the Bay Area remains a concern as active listings declined more than 5 percent in the region, further illustrating the region's lack of affordable homes for sale."
Other key facts from C.A.R.'s January 2015 resale housing report include:
- Housing inventory loosened throughout much of the state in January, though the San Francisco Bay area continued to be hamstrung by tight inventory. The available supply of existing, single-family detached homes for sale statewide rose from 3.3 months in December to 5 months in January. The index was 4.3 months in January 2014. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.
- The median number of days it took to sell a single-family home was extended in January, up from a revised 47.5 days in December to 52.4 days in January and from 44.3 days in January 2014.
- According to C.A.R.'s newest housing market indicator measuring sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is keeping sales prices in line with original asking prices. The statewide measure suggests that homes are selling at a median of 96.9 percent of the list price, down slightly from a ratio of 97.8 percent at the same time last year. The Bay Area is the only region where homes are selling at original list prices.
- The average California price per square foot** for an existing single-family home was $203 in January 2015, a decrease of 3.5 percent from the previous month, but a 2.7 percent increase from January 2014. Price per square foot at the state level has been showing an upward trend since early 2012, and has been rising on a year-over-year basis for 36 consecutive months. In recent months, however, the growth rate in price per square foot has slowed down significantly as home prices leveled off. San Mateo County had the highest price per square foot in January with $622/sq. ft., followed by Santa Clara ($508/sq. ft.), and Santa Cruz ($420/sq. ft.). The three counties with the lowest price per square foot in January were Lake ($111/sq. ft.), Siskiyou ($110/sq. ft.), and Yuba ($107/sq. ft.).
- Mortgage rates fell again in January, with the 30-year, fixed-mortgage interest rate averaging 3.67 percent, down from 3.86 percent in December and down from 4.43 percent in January 2014, according to Freddie Mac. The January 2014 average 30-year fixed rate was the lowest since May 2013, just before the Federal Reserve announced its intention to taper the bond buying program. Adjustable-mortgage interest rates also dipped in January, averaging 2.38 percent, down from 2.40 percent in December and down from 2.55 percent in January 2014.