California home sales got a boost in June, according to the latest state REALTOR® report. Lower interest rates and stabilizing home prices coaxed buyers away from the sidelines, though affordability continues to be a challenge for buyers in high-cost areas like Silicon Valley.
According to the California Association of REALTORS® June sales and price report released on Wednesday, sales of single-family homes in June increased 1.5 percent from May but were still down 4.8 percent from June 2013. June marked the eighth straight month that sales were below the 400,000 level and the eleventh straight decline on a year-over-year basis.
"While June home sales rose at the statewide level, the market is still constrained by tight supply and low housing affordability in areas of high demand, where job growth is robust and international buyers have a strong presence," said C.A.R. President Kevin Brown.
The statewide median price of an existing, single-family home slipped 2 percent from May's median price of $466,320 to $457,160, but the median was 6.6 percent above the revised $428,700 in June 2013. The statewide median home price has increased year over year for the previous 28 months, marking more than two full years of consecutive year-over-year price increases.
"Overall, however, with inventory improving and home sales slowly moving back up, the market is more balanced, and we could see further market normalization in the upcoming months as interest rates remain at the lowest levels we've seen so far this year," said Brown.
Mortgage rates dipped in June, with the 30-year, fixed-mortgage interest rate averaging 4.16 percent, down from 4.19 percent in May, but up from 4.07 percent in June 2013, according to Freddie Mac. Adjustable-mortgage interest rates in June averaged 2.40 percent, down from 2.43 percent in May and down from 2.60 percent in June 2013.
"Home prices are finally increasing at a healthier pace, and the smallest year-over-year price gain in more than two years suggests that prices are stabilizing," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Last year's frenzied market of multiple offers, which drove sales prices above listing prices, has tapered off as the sales-to-list price ratio has dropped to a more normal level at nearly 99 percent, which signals a return to a more balanced market."
Sales of single-family homes in Santa Clara County were down 1.8 percent from the previous month and down 1.9 percent from June 2013. The median price for a single-family home in June was $900,000, up 2.8 percent from the May median of $875,580 and 11.2 percent higher than the June 2013 median of $809,000.
In San Mateo County, sales of single-family homes in June actually rose 4.3 percent compared to the previous month, though still down 3.3 percent from June last year. The June 2014 median home price of $1,120,000 was 0.09 percent below $1,130,000 in May and 11.9 percent higher than the June 2013 median of $1,001,000.
"In high-cost areas like ours, sales are strong, but we are seeing buyers getting more selective and not as quick to jump at homes as last year," said David Tonna, president of the Silicon Valley Association of REALTORS®. "There are still multiple offers, but they have tapered, as well. A home may receive four multiple offers these days, when last year it may have received 12 or more offers."
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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