California Home Sales Lose Momentum in February

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According to the California Association of Realtors (C.A.R.), California home sales fell in February, but housing inventory increased as sellers gear up for the spring home-buying season.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 361,210 units in February.

February marked the fourth straight month that sales were below the 400,000 level and the seventh straight decline on a year-over-year basis.  Sales in February slipped 0.7 percent from a revised 363,930 in January but were down 13.7 percent from a revised 418,520 in February 2013.  The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the February pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

"The slower sales in February reflects diminished housing affordability after three years of solid price increases and interest rates that are nearly a full percentage point higher than a year ago," said C.A.R. President Kevin Brown.  "With the interest rate difference alone, home buyers this year would have to pay $150 more per month on their mortgage payment than last year, a substantial amount for many would-be home buyers trying to get into the market."

The statewide median price of an existing, single-family detached home declined 1.6 percent from January's median price of $410,990 to $404,250 in February.  February's price was 21.3 percent higher than the revised $333,180 recorded in February 2013, marking two full years of consecutive year-over-year price increases and the 20th straight month of double-digit annual gains, as sales of higher priced homes made up a larger share of the market compared to a year ago.  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.

"Supply conditions in the housing market have shown some improvement since the end of last year, except for the lowest price range where the inventory for distressed properties is depleted.  In the mid-priced range of $300,000-$750,000, which covers nearly half of all home sales, inventory is up 27 percent, while the supply of high-end homes - properties priced at or above $1 million, also is up 13 percent from a year ago," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  "The improvement in these prime price ranges will benefit trade-up buyers who are expected to dominate the market in 2014, as many of them will be searching for homes in these price categories."

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

• Housing inventory improved in February, with the available supply of existing, single-family detached homes for sale rising in February to 4.7 months, up from January's Unsold Inventory Index of 4.3 months. The index was 3.6 months in February 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 fell to 40 days in February, down from 44.3 days in January but up from a revised 34.3 days in February 2013.

• Mortgage rates were lower in February, with the 30-year, fixed-mortgage interest rate averaging 4.30 percent, down from 4.43 percent in January but up from 3.53 percent in February 2013, according to Freddie Mac.  Adjustable-mortgage interest rates in February averaged 2.54 percent, down from 2.54 in January and down from 2.61 percent in February 2013.