The California Association of REALTORS® (C.A.R.) reports increasing home prices, along with slightly higher interest rates, are affecting home sales and housing affordability. For the fourth straight month, statewide home sales declined in November. The November 2013 figure was the lowest since July 2010.
It's a "double-edged sword," according to C.A.R. 2014 president Kevin Brown. "Improving home prices are a double-edged sword for the housing market. While welcomed news for homeowners and prospective sellers, diminished affordability is squeezing out many buyers and dampening their enthusiasm for home purchasing," said Brown. "Buyers are playing the waiting game and putting their home search on hold until prices stabilize and more inventory becomes available in the market."
According to information more than 90 local REALTOR® associations and MLSs statewide, C.A.R. disclosed closed escrow sales of existing detached single-family homes in November totaled 387,520 units, down 3.4 percent from October. Home sales were down 12 percent from November 2012.
The statewide median price of an existing, single-family detached home dipped 1.2 percent from October's median price of $427,290 to $422,210 in November. November's price was 22.2 percent higher than $345,560 recorded in November 2012. It was also the 17th straight month of double-digit annual gains.
MLSListings Inc., the local multiple listing service of the Silicon Valley Association of REALTORS®, reports average and median prices in November 2013 for single-family homes in Silicon Valley are up as much as 31 percent from the previous year. Monterey and Santa Cruz counties had the highest median price increase at 31 percent and 29 percent, respectively. San Mateo and Santa Clara counties followed with an increase of 21 percent and 17 percent, respectively.
Compared to November 2012, sales across these counties have declined at double-digit levels, according to the MLS. Month-over-month and year-over-year inventory were down in these counties, as well. The November 2013 median price in Santa Clara County was $795,000. Home sales declined 22 percent from the previous month and were 20 percent lower than the November 2012 figure. The county's November's inventory was down 18 percent from October and down 13 percent from November 2012.
"November is traditionally a slower month for home sales because of the approaching holiday season, but there's no doubt price and higher interest rates are playing a big factor in a softer sales report," said Carolyn Miller, president of the Silicon Valley Association of REALTORS®.
Mortgage rates rose in November, with the 30-year, fixed-mortgage interest rate averaging 4.26 percent, up from 4.19 percent in October and up from 3.35 percent in November 2012, according to Freddie Mac. Adjustable-mortgage interest rates in November averaged 2.61 percent, down from 2.63 in October and up from 2.57 percent in November 2012.
The market should do well in 2014, said Miller. "We are seeing market forces adjust as we continue to recover from what was a major downturn. With the economy booming in Silicon Valley and healthy job growth boosting demand, we are confident that 2014 will be a good year for our local housing market," predicted Miller.
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.
For further information, please email or call the SILVAR office at (408) 200-0100.