California home sales -- and median price – accelerate
March 15, 2017
• Sales pace up nearly 5 percent from a year earlier
• February's statewide median home price was $478,790
• “California's housing market could lose steam in the long term”
After starting the year on a positive note in January, California home sales and median price backpedaled on a monthly basis in February, but still showed strong gains from a year earlier, according to data compiled by the California Association of Realtors.
Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 11th consecutive month and totaled a seasonally adjusted annualized rate of 400,500 units in February, according to information collected by CAR 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 February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The February figure was down 4.7 percent from the 420,100 level in January but up 4.9 percent compared with home sales in February 2016 of a revised 381,770, which was the weakest sales level in 2016.
"While it's encouraging to kick off the year with back-to-back yearly sales increases, moving forward, California's housing market could lose steam in the long term as the Fed begins to adjust the federal funds rate," says CAR President Geoff McIntosh. "In the short term, however, the specter of higher interest rates may push buyers off the fence to purchase a home before mortgage rates move even higher."
The median price of an existing, single-family detached California home fell below the $500,000 mark for the second straight month, but home prices remain seasonably strong. The median price was down 2.2 percent from $489,680 in January to hit $478,790 in February, according to the Realtors’ figures.
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.
Despite the back-to-back monthly price decline, February's median price still registered a 7.6 percent increase from the revised $444,780 recorded a year ago, CAR says. The annual gain was the largest year-over-year increase since January 2016 and was higher than the three-month average of 4.5 percent prior to February 2016.
"Despite a strong sales start for the year, the housing supply shortage in California continues to cast doubt on whether the sales momentum can be carried forward into the spring home-buying season," says CAR Senior Vice President and Chief Economist Leslie Appleton-Young. "The number of active listings has been on a downward trend for the past 20 months and has shown no signs of improvement. As we move into the spring home-buying season, we should see a marginal increase in listings, which will be offset by a pickup in sales. The inventory level is not likely to get better in the upcoming months."
Other key points from CAR's February 2017 resale housing report include:
• CAR’s Unsold Inventory Index, which measures the number of months needed to sell the supply of homes on the market at the current sales rate, edged up to 4.0 months in February from 3.7 months in January. The index stood at 4.7 months in February 2016.
• New statewide active listings continued to decline, falling 13.9 percent from a year ago. The year-over-year decline was the largest since May 2013.
• The median number of days it took to sell a single-family home dropped from 37.4 days in January to 33.4 days in February and was down from 41.5 days in February 2016.
• CAR’s sales-to-list price ratio was 98.6 percent of listing prices statewide in February, 98.1 percent in January and 98.2 percent in February 2016.
• The average price per square foot for an existing, single-family home statewide was $241 in February, $239 in January, and $223 in February 2016.
• San Francisco County had the highest price per square foot in February at $878/sq. ft., followed by San Mateo ($864/sq. ft.), and Santa Clara ($631/sq. ft.). Counties with the lowest price per square foot in February included Siskiyou ($123/sq. ft.), Tehama ($128/sq. ft.), and Kern ($130/sq. ft.).
• Mortgage rates have risen sharply since last fall. The 30-year, fixed-mortgage interest rate averaged 4.17 percent in February, up from 4.15 percent in January and up from 3.66 percent in February 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates dipped in February to an average of 3.20 percent, from 3.24 percent in January and 2.74 percent in February 2016.