California Home Sales Continued to Slow in August, Says C.A.R.

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The California Association of Realtors (C.A.R.) reported this week California home sales declined in August, reversing two months of increases, but the median home price did rise from the previous month.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 394,280 units in August. This past month marked the 10th straight month that sales were below the 400,000 level and the 13th straight month that sales have declined on a year-over-year basis.  Sales in August decreased 1.2 percent from 398,940 in July and were down 9.3 percent from 434,910 in August 2013.  The August 2014 sales level was the second highest for the year so far.  The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the August pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

"With more homeowners in a position to list their homes for sale following rising home prices, housing supply is improving across all price ranges as would-be sellers may be seeing this as an opportunity to list their homes for sale," said C.A.R. President Kevin Brown.  "While lower-than-expected interest rates are allowing more room for home prices to grow, the appreciation is also creating a housing affordability challenge for prospective home buyers and hindering them from taking advantage of the low rates."     

The median price of an existing, single-family detached California home rose 3.3 percent from July's median price of $464,750 to $480,280 in August and up 8.9 percent from the revised $441,010 recorded in August 2013.  The August 2014 price was the highest observed since 2007.  The statewide median home price has increased year over year for the previous 30 months, marking more than two full years of consecutive year-over-year price increases.

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.

"California's housing market continues to be bifurcated both geographically and demographically, with the San Francisco Bay Area and high-end housing markets outperforming other regions and market segments," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  "A strong job market and barriers to building new housing are creating an imbalance between supply and demand in some housing markets. Buyers who are not impacted by affordability issues are fueling sales in the high-end market, which is putting upward pressure on home prices."

Other key facts from C.A.R.'s August 2014 resale housing report include:

• Housing inventory inched up higher in August, with the available supply of existing, single-family detached homes for sale increasing from 3.8 months in August to 4 months in August. The index was a revised 3 months in August 2013.  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 lengthened in August, up from 35.7 days in July to 39.2 days in August and up from a revised 29.3 days in August 2013.

• Mortgage rates were down for the second straight month in August, with the 30-year, fixed-mortgage interest rate averaging 4.12 percent, down from 4.13 percent in July and down from 4.46 percent in August 2013, according to Freddie Mac.  Adjustable-mortgage interest rates in August were also down, averaging 2.37 percent, down from 2.39 percent in July and down from 2.65 percent in August 2013.