California Home Sales, Prices Uptick for Third Month

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According to the California Association of Realtors, California's housing market accelerated in April 2015 as the spring home-buying season kicked off with both higher home sales and prices for the third straight month.

Home sales rose above the 400,000 mark in April for the first time since October 2013 to post the highest level since August 2013. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 427,620 units in April, according to information collected by C.A.R.
 
The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the April pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The April figure was 9.2 percent higher than the revised 391,440 homes sold in March. Home sales were up 9.3 percent from a revised 391,330 in April a year ago, and the increase was the highest year-over-year change since May 2012. 

"It's encouraging that the spring home-buying season is off to such a strong start," said C.A.R. President Chris Kutzkey. "Sales activity is at the highest level in the last year and a half, and should remain solid throughout the rest of the season.  We are finally seeing some of the pent-up housing demand that we talked about in the past turning into actual sales, thanks to solid job growth, record-low interest rates, and looser lending requirements." 

The median price of an existing, single-family detached California home increased in April from both the previous month and year for the third consecutive month. The median home price was up 2.8 percent from $468,550 in March to $481,760 in April, the highest level since November 2007. April's median price was 7.4 percent higher than the revised $448,720 recorded in April 2014. 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.

"While it's a welcomed sign to see the growth in housing demand continue, the lack of supply remains a concern," said C.A.R Vice President and Chief Economist Leslie Appleton-Young. "The imbalance between the two sides not only intensifies market competition and pushes home prices higher, but also leads to housing affordability issues that could ultimately lower the homeownership rate if the problem persists."
 
Other key facts from C.A.R.'s April 2015 resale housing report include:
 

• While both sales and active listings increased from the previous year, sales grew at a much faster pace than did active listings, contributing to a decline in available homes for sale. The Unsold Inventory Index fell from the 3.8 months reported in March to 3.5 months in April.  The index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate, stood at 3.6 months in April 2014.  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 fell in April, down from 39 days in March to 34.2 days in April but was up from 33.9 days in April 2014.

• According to C.A.R.'s newest housing market indicator measuring sales-to-list price ratio, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices.  The statewide measure suggests that homes are selling at a median of 98.8 percent of the list price, essentially flat compared to a ratio of 98.7 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 107.1 percent, up from 105.2 percent a year ago.

• The average California price per square foot** for an existing single-family home was $232 in April 2015, an increase of 4 percent from the previous month and an 8.4 percent increase from April 2014.  Price per square foot at the state level has been showing an upward trend since early 2012, and has been rising on a year-over-year basis for 39 consecutive months.  In recent months, however, the growth rate in price per square foot has slowed down as home prices level off.  San Francisco County had the highest price per square foot in April at $793/sq. ft., followed by San Mateo ($735/sq. ft.), and Santa Clara ($569/sq. ft.).  The three counties with the lowest price per square foot in April were Siskiyou ($99/sq. ft.), Glenn ($113/sq. ft.), and Merced ($114/sq. ft.).

• Mortgage rates fell in April, with the 30-year, fixed-mortgage interest rate averaging 3.67 percent, down from 3.77 percent in March and down from 4.34 percent in April 2014, according to Freddie Mac.  Adjustable-mortgage interest rates were flat in April, averaging 2.46 percent, unchanged from March but up from 2.44 percent in April 2014.