Market News - July 2019
August 15, 2019
California home sales perk up in July for first time in more than a year, C.A.R. reports
- Existing, single-family home sales totaled 411,630 in July on a seasonally adjusted annualized rate, up 5.6 percent from June and up 1.1 percent from July 2018.
- July’s statewide median home price was $607,990, down 0.4 percent from June and up 2.8 percent from July 2018.
- Year-to-date statewide home sales were down 4.9 percent in July.
LOS ANGELES (Aug. 15) – The lowest mortgage interest rates in nearly three years helped jump start California’s housing market to post the first year-over-year sales gain and highest sales level in 15 months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 411,630 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
July’s sales figure was up 5.6 percent from the 389,730 level in June and up 1.1 percent from home sales in July 2018 of 407,030.
“Mortgage rates that dipped to the lowest level in nearly three years has helped reduce monthly mortgage payments for the past five consecutive months, giving buyers more purchasing power,” said C.A.R. President Jared Martin. “The boost in demand gave the housing market its first yearly gain since April 2018.”
After setting record prices for the past three months straight, the median price pulled back from June’s $610,720 but still registered higher than the previous year. July’s median price was $607,990, down 0.4 percent from June and up 2.8 percent from $591,230 in July 2018, marking the fourth straight month that the median price remained above $600,000.
“While it’s encouraging that home sales crept higher in July, the market will continue to be challenged by an overarching affordability issue, especially in high cost areas such as the Bay Area, which requires a minimum annual income well into the six figures to purchase a home,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young.
Other key points from C.A.R.’s July 2019 resale housing report include:
At the regional level, non-seasonally adjusted sales increased from a year ago in all major regions, except the San Francisco Bay Area, which experienced a 0.6 percent decline. The Central Valley recorded the largest gain at 5.2 percent, followed by the Central Coast region, which grew 5.0 percent. The Los Angeles Metro region posted a 4.0 percent increase, and sales in the Inland Empire improved by 2.4 percent. In the San Francisco Bay Area, Alameda County recorded the largest drop in non-seasonally adjusted sales from a year ago at 10.5 percent, followed by Contra Costa County (-5.0 percent) and San Mateo County (-3.0 percent). On the other hand, Marin, San Francisco and Sonoma counties posted double-digit sales gains from a year ago. Sales in the three remaining counties grew in the single digits. Non-seasonally adjusted sales rose in every county in Southern California, with Orange County rising the most at 6.7 percent, followed by San Bernardino (5.0 percent), Los Angeles County (4.7 percent), San Diego (3.4 percent), Ventura (2.1 percent) and Riverside (0.8 percent). Median home prices at the regional level continued to inch up in Southern California and the Central Valley regions, while the Central Coast and Bay Area declined slightly from a year ago. In the Southern California region, median home prices grew in every county, while most Bay Area region counties continued to experience price softening on a year-over-year basis. Median prices improved from the prior year in all Central Valley region counties, except San Benito.Active listings, which had been increasing year-over-year for the past 15 months, fell 2.1 percent from a year ago. The decrease in active listings and an increase in home sales contributed to a year-over-year decline in unsold inventory for the first time in 15 months. The Unsold Inventory Index (UII), which is a ratio of inventory over sales,was 3.2 months in July, down from 3.4 months in June and down from 3.3 months in July 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate. The median number of days it took to sell a California single-family home increased in July. Time on market inched up from 19 days in June to 21 days in July. It took a median number of 18 days to sell a home in July 2018.
C.A.R.’s statewide sales-price-to-list-price ratio* was 99.0 percent in July 2019 compared to 99.6 percent in July 2018. The average statewide price per square foot** for an existing, single-family home statewide reached $290 in July 2019 and was $288 in July 2018. The 30-year, fixed-mortgage interest rate averaged 3.77 percent in July, down from 4.53 percent in July 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.47 percent, compared to 3.84 percent in July 2018.
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 50 counties.
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 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.