The California Association of Realtors announced this month that after a couple months of lackluster growth in sales volume, statewide home sales rose to their highest level in nearly four years in June. Sales of existing homes surpassed the 400,000 mark for the fourth straight month.
Sales of existing, single-family detached homes in California totaled 450,960 units in June, according to information from more than 90 local Realtor associations and MLSes statewide. The June figure was up 10 percent from the revised 409,840 units in May and up 2.2 percent from June 2015 home sales. The month-to-month increase was the first double-digit monthly gain since January 2011, when existing home sales rose 11.3 percent from December 2014.
"Market conditions suggest that demand for housing will remain steady through the rest of the summer," said the state Realtor group's president, Pat "Ziggy" Zicarelli. "Inventory is still tight, especially at the low end of the market, and this keeps competition for those homes at an extremely high level. The recent march of mortgage rates to ever lower levels will also add to the strong demand for entry-level homes."
Rising demand and tight supply continue to drive up home prices. The June median price of an existing, single-family detached California home increased 5.5 percent in June to $519,440 from $492,320 in June 2015. June's median price was 0.1 percent lower than the revised $519,750 median in May 2016.
According to the state Realtor association's Unsold Inventory Index, the supply of homes on the market dipped slightly to 3.2 months in June from 3.4 months in May. The index stood at 3.2 months in June 2015. The long-run average home supply is 6.1 months, indicating inventory levels are running at roughly 60 percent of normal.
June home sales in Santa Clara County were 4.7 percent higher than in May and 4 percent below June 2015 sales. The June median price for a single-family home in Santa Clara County was $1,050,000, 4.5 percent below the May median of $1,100,000 and 6.1 percent above the June 2015 median of $990,000.
In San Mateo County, sales of single-family homes in June were 9.3 percent higher than May home sales and 2.1 percent above June sales last year. San Mateo County's June median home price was $1,306,250, 6.2 percent below the May median of $1,392,500 and half a percentage higher than the June 2015 median of $1,300,000.
"We are noticing prices stabilizing and as such, home sales in the median price range continue to rise, even with very tight inventory. This market environment with strong home sales is likely to continue as mortgage interest rates are staying low," said Karen Trolan, president of the Silicon Valley Association of Realtors. "There continues to be great job growth with a limited supply of housing in the region."
Inventory of homes for sale for both Santa Clara and San Mateo counties was much lower than the statewide average. In June, Santa Clara County had 2 months of unsold inventory, while San Mateo County had 1.9 months, slightly lower from 2.1 months and 2 months, respectively, from the previous month.
Economists expect mortgage rates to remain low in the foreseeable future due to global economic uncertainty. Mortgage rates declined in June, with the 30-year, fixed-mortgage interest rate averaging 3.57 percent, compared with 3.60 percent in May and 3.98 percent in June 2015, according to Freddie Mac. Adjustable-rate mortgage interest rates slipped in June to an average of 2.78 percent, a decline from 2.81 percent in May and 2.99 percent in June 2015.
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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