California existing home sales edged up in May, rising above the 400,000 benchmark level for the third straight month, even as strained housing supply continued to push prices higher, according to the California Association of REALTORS® (C.A.R.).
Closed escrow sales of existing, single-family detached homes in California totaled 410,090 units in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSes statewide.
"While May home sales edged up slightly, we are seeing a moderation, driven by tight housing inventory and reduced affordability," said Pat "Ziggy" Zicarelli, C.A.R. president. "Affordable areas, such as the Inland Empire and Central Valley, where housing supply is relatively more abundant, are outperforming the San Francisco Bay Area, where thin housing availability is hampering home sales."
A change in the mix of sales and a continued mismatch between supply and demand pushed the median price of an existing, single-family detached California home 1.8 percent higher in May to $518,760 from $509,590 in April. May's median price was 6.3 percent higher than the revised $487,960 in May 2015. The median price is still below the pre-recession peak of $594,530 reached in May 2007.
"The California housing market is growing modestly so far this year, with home sales running 2 percent higher year to date," according to Leslie Appleton-Young, C.A.R.'s vice president and chief economist. "Fundamental drivers, such as household formation and economic growth will continue to move housing demand forward. However, constrained inventory, low affordability, and regional disparities will be a drag on this year's market outlook, which is forecast to see a 1.3 percent growth in sales and a 5 percent increase in the median home price."
In Santa Clara County, May sales of single-family homes rose 8.8 percent from the previous month and were 1.3 percent below sales in May 2015. Meanwhile, the May median price rose 1.4 percent to $1,100,000 from $1,085,000 in April, and was 10.8 percent above the May 2015 median of $993,000.
Karen Trolan, president of the Silicon Valley Association of REALTORS® (SILVAR), said the market is seeing more inventory and some prices appear to be adjusting, but there is still a tight supply. "The local market will continue to be strong as our economic growth. There continues to be an increase in job creation in our valley, which affects our supply and demand," said Trolan.
According to C.A.R.'s Unsold Inventory Index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate, Santa Clara County housing inventory for May stayed at 2.1 months, unchanged from April, but up from 1.8 months in May 2015. The statewide index stood at 3.4 months in May. The long-run average home supply is 6.1 months, indicating inventory levels are running at roughly 60 percent of normal.
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.