California Home Sales Dip in June

According to the California Association of Realtors, after rebounding in May, California home sales fell below the benchmark 400,000 level in June 2019 as sales declined from both the previous month and year.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 389,690 units in June 2019. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

June's sales figure was down 4.2 percent from the 406,960 level in May and down 5.1 percent from home sales in June 2018 of 410,800. Sales fell below the 400,000 benchmark again after rebounding in May. Sales have been under the benchmark for 10 of the past 11 months.

"With softer price growth and interest rates at the lowest levels in nearly three years, monthly mortgage payments on a median-priced home have fallen for four straight months. This allows homebuyers to save hundreds of dollars a month on the same home or to potentially consider a slightly more expensive home for the same monthly cost," said C.A.R. President Jared Martin. "Combined with the long-term benefits of homeownership on personal wealth and quality of life, 2019 is a good time to purchase a home for the long haul."

While the median price set another record in June, the increase was tempered. June's median price was $611,420, essentially unchanged from $611,190 in May and up 1.4 percent from $602,770 in June 2018.

"With low rates supporting sales and elevating home prices in the last few months, the market outlook has shown some improvement since the first quarter," said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. "As such, we have revised our 2019 forecast upward for home sales to reach 385,460 and for the median price to hit $593,000, from the previous forecast of 375,100 and $568,800, respectively."      

Key highlights of June 2019 California housing report include:

• At the regional level, sales fell from a year ago in all major regions on a non-seasonally adjusted annual basis, with the Central Valley recording the largest drop at 9.4 percent. Sales fell 8.8 percent in the San Francisco Bay Area and 8.4 percent in the Los Angeles Metro region. The Central Coast region experienced a 6.4 percent decline, while the Inland Empire recorded a 5.2 percent decrease.
• In the San Francisco Bay Area, only Napa County recorded a non-seasonally adjusted annual sales increase at 19.2 percent, while sales were essentially flat in Sonoma County. The seven remaining counties experienced declines ranging from the low single-digits in Marin to a 21 percent dip in San Francisco.
• Home sales in Southern California were down 9.1 percent, with every county outside of Ventura (0.6 percent) posting declines. Los Angeles (-12.6 percent), San Diego (-12.5 percent), Orange (-7.6 percent) and San Bernardino (-7.2 percent), and Riverside (-4.0 percent) counties all recorded sales declines.
• At the regional level, median home prices were up from a year ago in all major regions except for the San Francisco Bay Area, which saw an 8.1 percent decline. Only San Francisco County recorded a solid 8.8 percent year-over-year price increase, while elsewhere in the nine-county region, prices followed the statewide trend of cooling price growth.
• In Southern California, only Ventura County experienced a year-over-year price decline. Other counties in the region recorded annual price growth ranging from 0.8 percent in Orange County to 5.7 percent in San Bernardino.
• Median prices improved from the prior year in all Central Valley region counties, even as the region posted the weakest sales.
• Active listings, which have been decelerating since December 2018, grew 2.4 percent from a year ago -- the smallest increase since April 2018.
• The number of homes available for sale has moderated significantly, suggesting that market is getting back toward being more balanced between supply and demand -- but inventory remains relatively tight from a historical perspective. The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was 3.4 months in June, up from 3.2 months in May and up from 3.0 months in June 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate. 
• The median number of days it took to sell a California single-family home increased in June. Time on market inched up from 18 days in May to 19 days in June. It took a median number of 15 days to sell a home in June 2018.
• C.A.R.'s statewide sales-price-to-list-price ratio* was 99.2 percent in June 2019 compared to 100 percent in June 2018.
• The average statewide price per square foot** for an existing, single-family home statewide reached $292 in June 2019 and was $290 in June 2018.
• The 30-year, fixed-mortgage interest rate averaged 3.8 percent in June, down from 4.57 percent in June 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.48 percent, compared to 3.82 percent in June 2018.