California Home Sales Drop to End 2013, Prices Rise

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Home sales in California dropped for the fifth consecutive month in December, as tight housing inventory and higher home prices kept would-be buyers on the sidelines.

The slump in sales during the second half of the year resulted in a 5.9 percent drop in yearly sales compared to 2012, according to the California Association of Realtors. 

"We typically see an uptick in distressed sales at the end of the year as lenders try to move these properties off their books," C.A.R. president Kevin Brown said in the report.  "However, the supply of foreclosures and short sales is the lowest it's been since well before the financial crisis, greatly constraining the number of these transactions."

Sales of existing, single-family homes totaled a seasonally adjusted annualized rate of 361,809 in December, dropping 6.7 percent from the previous month and were 18.6 percent lower than December 2012. 

The last report for pending home sales in California showed a drop in November. 

Home prices have been climbing throughout the state, with pre-2007 level seen in parts of the Bay Area, according to the report.  

"Higher prices and rising rates as the Fed slowly tapers are additional factors in the sales slowdown evidenced in the December numbers," Mr. Brown said.  

The statewide median price for an existing, single-family home reached $438,040 in December, increasing 3.7 percent from November, and reversing a three-month decline.  

December's median price was 19.7 percent higher than the revised $365,840 in December 2012, representing a year and a half of double-digit annual gains. This was the first time in 15 months the annual gain dropped below 20 percent, according to the report. 

"While the month-to-month price gain was higher than normal, home prices have been stabilizing in the second half of 2013, which is positive news for buyers who have been putting their home search on hold until prices leveled off," C.A.R. chief economist Leslie Appleton-Young said in the report. 

In 2013, the statewide median sales prices reached $407,180, increasing 27.5 percent from the $319,300 median in 2012.  

"The increase in the median price can be partly attributed to the increase in sales of higher-priced properties, where tight inventory was less of a factor," Ms. Appleton-Young said. 

 More from the report:
 

• The available supply of existing, single-family detached homes for sale dropped in December to 3 months, down from November's Unsold Inventory Index of 3.6 months. The index was 2.6 months in December 2012. 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 also increased to 40.2 days in December, up from 36.7 days in November and from 38.1 days in December 2012.

• Mortgage rates rose in December, with the 30-year, fixed-mortgage interest rate averaging 4.46 percent, up from 4.26 percent in November and up from 3.35 percent in December 2012, according to Freddie Mac.  Adjustable-mortgage interest rates in December averaged 2.56 percent, down from 2.61 in November but up from 2.54 percent in December 2012.