California Home Sales Make Comeback in December, After Slower November

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According to the California Association of Realtors, California existing home sales rebounded in December 2015, after new loan disclosure rules delayed closings in November 2015.

U.S. home sales exceeded the 400,000-unit level in December after falling short in November. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 405,530 units in December, 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 December pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

For 2015 as a whole, a preliminary figure of 407,060 single-family homes closed escrow in California, up 6.4 percent from a revised 382,720 in 2014.

The December figure was up 9.6 percent from the revised 370,070 level in November and up 10.7 percent compared with home sales in December 2014 of a revised 366,460. The month-to-month increase in sales was the largest since January 2011, and the year-to-year increase was the largest since July 2015.

"As we speculated, sales that were delayed in November because of The Consumer Financial Protection Bureau's new loan disclosure rules closed in December instead, which led to the greatest monthly sales increase in nearly five years," said C.A.R. President Ziggy Zicarelli. "Sales increased across the board in all price segments in December, but improvement in the sub-$500,000 market was more pronounced as many homes affected by the new loan disclosures were priced under the conforming loan limit."

The median price of an existing, single-family detached California home rose 2.6 percent in December to $489,310 from $477,060 in November. December's median price was 8.0 percent higher than the revised $453,270 recorded in December 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. The year-to-year price gain was the largest since August 2014.

"In line with our forecast, California's housing market experienced strong sales and price growth throughout last year, with the median price increasing 6.2 percent for the year as a whole to reach $474,420 in 2015," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Looking forward, we expect the foundation for the housing market to remain strong throughout the year, with moderate increases in home sales and prices, but headwinds of tight housing supply and low affordability will remain a challenge."

Other key points from C.A.R.'s December 2015 resale housing report include:

• While more sales closed in December, the number of active listings continued to drop from both the previous month and year. Active listings at the statewide level dropped 11.7 percent from November and decreased 7.9 percent from December 2014. At the regional level, total active listings continued to decline from the previous year in Southern California, Central Valley, and the San Francisco Bay Area, dropping 9.6 percent, 7.6 percent, and 5.2 percent, respectively.

• The sharp increase in sales in December and fewer listings combined to tighten the available supply of homes on the market. C.A.R.'s Unsold Inventory Index fell to 2.8 months in December from 4.2 months in November. The index stood at 3.2 months in December 2014. 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 increased in December to 39.5 days, compared with 37.5 days in November and 44.1 days in December 2014.

• According to C.A.R.'s newest housing market indicator, which measures the sales-to-list price ratio*, properties are 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 sold at a median of 97.9 percent of the list price in December, up from 97.2 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 100.7 percent in December, up from 100 percent a year ago.

• The average price per square foot** for an existing, single-family home was $230 in December 2015, up from $222 in December 2014. 

• San Francisco continued to have the highest price per square foot in December at $749/sq. ft., followed by San Mateo ($715/sq. ft.), and Santa Clara ($568/sq. ft.).  The three counties with the lowest price per square foot in December were Siskiyou ($107/sq. ft.), Tulare ($123/sq. ft.), and Merced ($124/sq. ft.).

• Mortgage rates inched up in December, with the 30-year, fixed-mortgage interest rate averaging 3.96 percent, up from 3.94 percent in November and up from 3.86 percent in December 2014, according to Freddie Mac.  Adjustable-mortgage interest rates also edged up, averaging 2.66 percent in December, up from 2.63 percent in November and up from 2.40 percent in December 2014.