Slower price gains and the lowest interest rates in nearly two years did little to spur November home sales as low housing affordability and tight supply conditions remained obstacles to entering the market for would-be buyers, according to a California Association of REALTORS® report released on Wednesday. However, in places like Silicon Valley, an MLSListings Inc. review of the numbers for median price and total dollars sold in the counties of San Mateo and Santa Clara shows these real estate markets continue to be stable.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted 376,480 units in November, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. Sales in November were down 5.3 percent from October and down 3.4 percent from November 2013. Home sales have been below the 400,000 level since November 2013.
"The declining sales-to-list price ratio suggests that mismatched expectations of home prices between sellers and buyers still exist in most markets, except for the Bay Area, where there's a dearth of homes for sale," said 2015 C.A.R. President Chris Kutzkey. "Prospective buyers facing affordability constraints recognize the slowing housing market and are looking for deals, while many sellers are still reluctant to adjust their listing prices to reflect the moderation of price gains in recent months."
The median price of an existing, single-family detached California home slipped 1.1 percent from October's median price of $450,270 to $445,280 in November, but was up 5.2 percent from the revised $423,090 recorded in November 2013. The statewide median home price has been higher on a year-over-year basis for more than two years, but price gains have narrowed over the past few months.
"Despite a highly favorable interest rate environment, the housing market is being hindered by low housing affordability and a lack of homes for sale, especially in highly desired geographic areas," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The San Francisco Bay Area, which has an extreme housing supply shortage due to robust economic growth, is a perfect example of how these factors have slowed down home sales this year."
The Bay Area is the only region where homes are selling above list prices and are generally selling about 0.5 percent more than asking price, according to C.A.R. MLSListings Inc. data shows of the five reporting counties of Monterey, San Benito, San Mateo, Santa Clara and Santa Cruz, San Mateo County saw the highest median price gain of $1,100,000 in November, up 18 percent from November 2013. The median price for a single-family home in Santa Clara County was $852,500 in November 2014, up 7 percent from the November 2013 median of $795,000.
San Mateo County also leads the way among the five counties, with a whopping 30 percent increase in total dollars sold when comparing November 2014 with November 2013. Monterey County is up 10 percent, and Santa Cruz County showed a 2 percent increase. San Benito County saw a modest decrease of 6 percent year-over-year, and Santa Clara County was down a small 1 percent.
"Fewer homes are on the market, which means fewer homes sold, but because of the stiff competition for homes, price gains continue. There are still multiple offers in pockets of the state, particularly in Silicon Valley, because of the employment growth in the region," said David Tonna, president of the Silicon Valley Association of REALTORS® (SILVAR).
Price per square foot at the state level has been rising on a year-over-year basis for 34 consecutive months. According to C.A.R., the median price per square foot for an existing single-family California home was $214 in November 2014, a decrease of 0.9 percent from the previous month and a 4.4 percent increase from November 2013. San Mateo County had the highest price per square foot in November with $654/sq. ft., followed by Santa Clara ($502/sq. ft.), and Santa Cruz ($399/sq. ft.).
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.