California Home Sales Soften in May, Says C.A.R.

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According to the California Association of Realtors, California home sales softened in May 2015, but the housing market momentum continued to be solid as the spring home-buying season marked higher year-over-year home sales and prices for the fourth straight month. 

California May 2015 Home Sales Stats:

• Existing, single-family home sales totaled 423,360 in May on a seasonally adjusted annualized rate, down 1.1 percent from April but up 8.9 percent from May 2014.

• Statewide sales were above 400,000 mark for second straight month

• May statewide median home price was $485,830, up 0.8 percent from April and 4.4 percent from May 2014.

• California median price was the highest since November 2007.

• Available housing supply remains constrained with 3.5 months of inventory.

Home sales rose above the 400,000 mark in May for the second straight month since October 2013 and were the second highest level in nearly two years. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 423,360 units in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the May pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The May figure was down 1.1 percent from the revised 427,880 homes sold in April, slightly below the long-run April-to-May average sales increase of 0.6 percent. Home sales were up 8.9 percent from a revised 388,690 in May a year ago though, and the statewide sales figure so far has outpaced last year by more than 5 percent. 

"The spring home-buying season continues to be strong, especially in areas where insufficient housing supply is less of an issue," said C.A.R. President Chris Kutzkey. "With mortgage interest rates edging up recently and an imminent increase in rates by the Federal Reserve, housing affordability concerns will be heightened but may also prompt prospective buyers to feel a sense of urgency to enter the market." 

The median price of an existing, single-family detached California home edged up in May from both the previous month and year for the fourth consecutive month. The median home price was up 0.8 percent from $481,880 in April to $485,830 in May, the highest level since November 2007. May's median price was 4.4 percent higher than the revised $465,470 recorded in May 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.

"A healthy growth rate in home prices is an essential ingredient to a sustainable housing market recovery," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "With the statewide median price increasing at a pace more in line with the historical norms since late 2014, regional markets across the state are finally showing sales improvements this year."

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

• While sales continued to improve from last year at the state level, the number of active listings dipped slightly from the previous year, keeping the supply of homes on the market flat. The May Unsold Inventory Index was unchanged from the 3.5 months reported 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 3.7 months in May 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 fell in May, down from 34.3 days in April to 28.5 days in May and 31.8 days in May 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 99 percent of the list price, essentially flat compared to a ratio of 98.8 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 107.3 percent, up from 104.9 percent a year ago.

• The average California price per square foot** for an existing single-family home was $226 in May 2015, a decrease of 0.4 percent from the previous month but a 3.2 percent increase from May 2014.  Price per square foot at the state level has been on an upward trend since early 2012, and has been rising on a year-over-year basis for 40 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 May at $818/sq. ft., followed by San Mateo ($775/sq. ft.), and Santa Clara ($591/sq. ft.).  The three counties with the lowest price per square foot in May were Siskiyou ($104/sq. ft.), Kings ($116/sq. ft.), Mariposa ($117/sq. ft.) and Tulare ($117/sq. ft.).

• Mortgage rates increased in May, with the 30-year, fixed-mortgage interest rate averaging 3.84 percent, up from 3.67 percent in April but down from 4.19 percent in May 2014, according to Freddie Mac.  Adjustable-mortgage interest rates edged up in May, averaging 2.49 percent, up slightly from 2.46 in April and 2.43 percent in May 2014.