California's housing market saw a softening of home sales and prices in October, but is still on target to meet forecast projections, according to the California Association of REALTORS® (C.A.R.).
Although home sales exceeded the 400,000 level in October for the seventh consecutive month and posted higher on a year-to-year basis for the ninth straight month, closed escrow sales of existing, single-family detached homes in California totaled 403,510 units in October. The October figure was down 5.1 percent from September and up 1.3 percent compared with home sales in October 2014.
REALTORS® see continued moderate growth for the state's housing market. "With job growth increasing the most since late 2014 and interest rates remaining below 4 percent, the demand for housing should continue to grow at a modest pace. Statewide sales are on track to finish the year with a mid-single-digit increase from last year," said Ziggy Zicarelli, C.A.R. 2016 president.
The median price of an existing, single-family detached California home slipped 1.3 percent in October to $475,990 from September's median of $482,150. October's median was 5.7 percent higher than the revised $450,460 recorded in October 2014.
"Housing affordability is an issue in many parts of California and the impact it has on sales varies from region to region. With home prices in the Bay Area averaging more than 7 percent higher than a year ago, we're now seeing the negative effect on sales due to low housing affordability as higher prices have put home buying out of reach for many potential buyers," said Leslie Appleton-Young, C.A.R. vice president and chief economist.
In Santa Clara County, October home sales were down 8.1 percent from September and down 8.7 percent from a year ago. The October median price of an existing home in Santa Clara County was $951,000, down 0.4 percent from $955,000 and 9.3 percent above the October 2014 median of $870,000.
In San Mateo County, month-to-month home sales dropped 10.4 percent and were 20.4 percent below sales in October 2014. The October median of $1,188,940 was 0.9 percent lower than the $1,200,000 September median and 11 percent higher than the October 2014 median of $1,071,000.
"Clearly, homes have become unreachable in Silicon Valley for the average buyer," said Chris Isaacson, president of the Silicon Valley Association of REALTORS®. "According to the latest housing affordability report, only 19 percent of Santa Clara County households can afford to purchase a medium-priced home. In San Mateo County, the housing affordability index is at 13 percent. Inventory has improved slightly from last year, to a little over two months, but it is still way below the six- to seven-month supply in a normal market."
According to the C.A.R. housing market indicator, most properties are generally selling below the list price statewide, except in the San Francisco Bay Area where homes are selling above original list prices. San Francisco had the highest price per square foot in October at $778/sq. ft., followed by San Mateo ($745/sq. ft.), and Santa Clara ($572/sq. ft.).
Mortgage rates were unchanged in October, with the 30-year, fixed-mortgage interest rate averaging 3.80 percent, down from 3.89 percent in September and from 4.04 percent in October 2014, according to Freddie Mac. Adjustable-mortgage interest rates also were essentially the same, averaging 2.56 percent in October, down incrementally from 2.59 percent in September but up from 2.41 percent in October 2014.
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.