California home sales fell for the third straight month last month, according to the California Association of REALTORS®. Home sales slowed down nationally, as well, which could reflect the housing market is moving toward a more balanced and sustainable direction.
C.A.R. reports sales of single-family detached homes in October were down 2.7 percent from September and down 11.1 percent from October 2012. The statewide median price of an existing, single-family detached home was down 0.3 percent from September's median price of $428,740 to $427,290 in October. October's price was 25.3 percent higher than the revised $340,910 recorded in October 2012, marking the 16th straight month of double-digit annual gains, according to the report.
C.A.R. vice president and chief economist Leslie Appleton-Young said low inventory has caused home prices to rise. This and higher interest rates have hurt housing affordability. "The recent jump in interest rates, coupled with the run-up in home prices since the beginning of this year, lowered housing affordability. As we enter the slower home buying season, we expect home prices to be capped by seasonal factors and annual price gains to continue to taper off in the coming months."
Carolyn Miller, president of the Silicon Valley Association of REALTORS® said she expects prices to rise, though not substantially. Consumers are more likely to see a more balanced marketplace in the future. "It appears we are returning to a more balanced market, where prices are more sustainable. Demand for homes in the region is still very strong," said Miller.
The San Francisco Bay Area continues to stand out, as October sales of single-family homes in the region were up 13.4 percent from the previous month and 0.1 percent higher year-to-year. The median price of a single-family home in the region was $679,640, down 1.1 percent from the September 2013 median of $687,260, and up 14.6 percent from the $593,080 median in October 2012.
Existing-home sales nationwide declined for the second consecutive month in October, and home prices continue to see double-digit year-over-year gains, according to the National Association of REALTORS®. Total existing-home sales, including single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent in October from September, but are 6 percent higher than the October 2012 level. The national median existing-home price for all housing types was $199,500 in October, up 12.8 percent from October 2012, which is the 11th consecutive month of double-digit year-over-year increases.
NAR chief economist Lawrence Yun, gave his perspective on the housing market. "The erosion in buying power is dampening home sales," he said. "Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains," said Yun.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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