California home sales in August declined year over year for the sixth consecutive month. The tight supply of homes for sale cut into demand, especially in high cost areas of the San Francisco Bay region, according to the California Association of Realtors.
The state Realtor group's August housing market report found closed escrow sales of existing, single-family detached homes in California totaled 420,360 units in August, up 1.1 percent from the revised 415,840 level in July. August home sales were down 2.2 percent compared with 429,900 home sales in August 2015.
"We are seeing the market tempering, which is being driven by reduced affordability and not enough homes for sale on the market, particularly in the San Francisco Bay region, where runaway home prices have constrained home sales," said California Association of Realtors president Pat "Ziggy" Zicarelli.
Two of the region's least affordable counties – Marin and Santa Clara – saw sales fall from a year ago, while Contra Costa and Sonoma counties experienced more modest slowdowns. Conversely, in many parts of the Central Valley, where homes are more affordable and demand has been relatively strong, home sales posted healthy increases. Sales of condominiums statewide were strong due to their relative affordability.
The statewide median price remained above the $500,000 mark for the fifth straight month and is at its highest level in nearly seven years. The median price of an existing, single-family detached California home was up 1.7 percent in August to $526,580 from $517,650 in July. August's median increased 5.8 percent from $497,520 recorded in August 2015.
Despite fewer sales, the continuing rise of home prices suggests demand continues to outstrip new supply, pushing prices higher. "As jobs and incomes have continued to improve for workers in the state, we're seeing more demand by primary home buyers at the lower end of the market where inventory is tightest, which is pushing home prices higher," said Leslie Appleton-Young, the state Realtor group's vice president and chief economist.
This situation is exemplified in Silicon Valley, said Karen Trolan, president of the Silicon Valley Association of Realtors. Trolan said according to data recently presented to the Realtors by Santa Clara County assessor Larry Stone, Santa Clara County added 42,500 jobs in 2015, following 38,900 in 2014 and 44,000 in 2013. The county has had 60 consecutive months of job gains, reaching 4.3 percent of growth, better than San Francisco and the state's 2.8 percent job growth.
"Employment growth in Silicon Valley is continuing to build. Apple plans to hire thousands more workers once its new campus in Cupertino opens early next year. Facebook, Google, LinkedIn and other companies continue to expand their own workforce. Our housing supply in the region is very limited," said Trolan.
Santa Clara County home sales were 0.9 percent above July sales and 8.8 percent lower than in August 2015. The August median sale price of a single-family home in Santa Clara County was $975,000, 6.7 percent below the July median of $1,045,000 and 0.2 percent above the August 2015 median of $973,000. Inventory remained at 2.3 months in August and July, up from 1.9 months in August 2015. Six months inventory is considered normal for the market.
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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