Existing home sales in California fell in November from the previous month and year for the first time in nearly a year, according to the latest state REALTOR® report. The new Know Before You Owe TILA-RESPA Integrated Disclosure rule could be delaying closings, according to REALTOR® officials.
According to the California Association of REALTORS® (C.A.R.), home sales posted below the 400,000 level in November for the first time since March 2015 and were at the lowest level since February 2015. Closed escrow sales of existing, single-family detached homes totaled 369,680 units in November, down 8.4 percent from the revised 403,580 level in October and down 1.6 percent compared with home sales in November 2014 of a revised 375,740. The year-to-year decrease was the first since January 2015 and was significantly below the six-month average of 8.3 percent observed between May 2015 and October 2015.
The new disclosure rules could be delaying closings, as well as low housing affordability due to tight supply, according to REALTOR® officials. "The Consumer Financial Protection Bureau's Know Before You Owe TILA-RESPA Integrated Disclosure, or TRID, which was implemented in early October, may have affected home sales in the last couple of months," said Ziggy Zicarelli, C.A.R. president. "Some sales may have been either pulled forward into September to beat TRID's effective date or been delayed. The impact, however, should be transitory as the roll-out and implementation process move further along."
The median price of an existing, single-family detached California home dipped 0.2 percent in November to $475,000 from $475,990 in October. November's median price was 6.8 percent higher than the revised $444,630 recorded in November 2014.
According to Leslie Appleton-Young, C.A.R.vice president and chief economist, the Federal Reserve's announcement to raise the federal funds rate shouldn't have a significant adverse impact on the housing market since rates are still historically low. "In fact, it may spur potential home buyers who have been waiting on the sidelines to finally jump in now that they see the rates may continue to rise slowly in the next couple of years," she said.
Properties are generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices.
"The Bay Area is the only region where homes are selling above original list prices due to constrained supply. We are still seeing much activity in the region," observed Chris Isaacson, president of the Silicon Valley Association of REALTORS®.
In Santa Clara County, the median price of an existing, single-family detached California home rose 1.5 percent in November to $965,000 from $951,000 in October. November's median price was 13.5 percent higher than $850,000 recorded in November 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.
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