The lowest mortgage rates in 18 months were not enough to drum up California home sales in October. Last month's home sales stayed flat and home prices increased at the slowest pace since early 2012, according to the California Association of REALTORS® (C.A.R.). The Silicon Valley region continues to experience low inventory and strong price and sales growth.
Information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide shows closed escrow sales of existing, single-family detached homes in California totaled 396,220 units in October, virtually unchanged from a revised 396,400 in September, but down 1.9 percent from a revised 404,000 in October 2013. October marked a full year that statewide sales were below the 400,000 level.
Mortgage rates fell in October, with the 30-year, fixed-mortgage interest rate averaging 4.04 percent, down from 4.16 percent in September and down from 4.19 percent in October 2013, according to Freddie Mac. The October 2014 average 30-year fixed rate was the lowest since May 2013, just before the Federal Reserve announced its intention to taper the bond buying program. Adjustable-mortgage interest rates in October also fell, averaging 2.41 percent, down from 2.43 percent in September and down from 2.63 percent in October 2013.
"As we move into the off-peak home buying season, prospective buyers who may have delayed their purchase earlier in the year should take advantage of the current favorable market conditions and resume their home search," said 2015 C.A.R. President Chris Kutzkey. "With home prices stabilizing and interest rates dropping back down to levels not seen since mid-last year, housing affordability should improve to benefit buyers."
The median price of an existing, single-family detached California home fell 2.3 percent from September's median price of $461,370 to $450,620 in October but was up 5.4 percent from the revised $427,540 recorded in October 2013. The statewide median home price has been higher on a year-over-year basis for more than two years, according to C.A.R.'s data.
Though home sales essentially were unchanged statewide, there were pockets of strong sales growth, said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The Bay Area, for example, continued to exhibit strong price gains, decent sales growth, and extremely low housing inventory," said Appleton-Young.
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. The Bay Area is the only region where homes are selling above list prices and are generally selling about 1.3 percent more than asking price. San Mateo County had the highest price per square foot in October with $659/sq. ft., followed by Santa Clara ($521/sq. ft.).
Silicon Valley saw month-to-month home sales and prices increases in October. "Our housing inventory is still very tight and demand continues to be strong as businesses in the region, mostly the tech companies, continue to expand their work force," said David Tonna, president of the Silicon Valley Association of REALTORS®.
Month-to-month sales of single-family homes in Santa Clara County increased 4.8 percent, while year-to-year sales were down 2.2 percent. The October median home price of an existing single-family home in Santa Clara County was $870,000, up 2.4 percent from September, and up 13 percent from October 2013.
In San Mateo County, month-to-month sales of single-family homes rose 8.3 percent from September, but they were down 6.1 percent from October last year. The October median home price of an existing single-family home was $1,071,000, down by a slight 0.4 percent from September's median and up 17.7 percent from the median in October 2013.
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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