Bolstered by healthy sales activity in Southern California and the Central Valley, California existing home sales and median price gained ground in October, according to the California Association of REALTORS® (C.A.R.).
Existing, single-family home sales totaled 442,970 in October, up 4.1 percent from September and 8 percent from October 2015. Home sales remained above the 400,000 pace for the seventh straight month, and were up year-over-year for the second consecutive month. The year-over-year increase was the largest since January, and October's sales level was the highest since July 2013.
"With prices continuing to increase amid a low supply of homes for sale on the market, especially in the San Francisco Bay Area and coastal regions, home buyers are migrating toward lower-priced homes in more affordable inland areas," said Geoff McIntosh, C.A.R.'s 2017 president. "As a result, home prices at the lower end of the market have risen significantly in the past year, challenging an already depressed homeownership rate."
The statewide median price remained above the $500,000 mark for the seventh consecutive month. The median price of an existing, single-family detached California home was up 1.2 percent in October to $513,520 from a revised $507,260 in September. October's median price increased 7.3 percent from the revised $478,780 recorded in October 2015.
The market continues to experience a supply issue which remains a threat to home sales in the short run, said C.A.R.'s vice president and chief economist Leslie Appleton-Young. "With available inventory below normal levels, the dearth of listings suggests that the market will remain tight over the near term."
October single-family home sales in Santa Clara County were up 0.4 percent from September and 8.4 percent higher than October 2015 sales. In San Mateo County, home sales were up 6.6 percent from September and 9.3 percent from October 2015.
The October median price for a single-family home in Santa Clara County was $1,047,500, 4.8 percent higher than the September median of $1,000,000 and 10.1 percent higher than the October 2015 median of $951,000.
"Home sales are still very strong as many home buyers want to purchase a home before interest rates increase, and it is very likely they will," said Karen Trolan, president of the Silicon Valley Association of REALTORS®. "Lower interest rates can lower monthly payments dramatically and save buyers money over the life of the loan."
Mortgage rates have already started to increase and are likely to rise higher as the Federal Reserve normalizes monetary policy. Mortgage rates edged slightly higher in October, with the 30-year, fixed-mortgage interest rate averaging 3.47 percent, up from 3.46 percent in September but down from 3.80 percent in October 2015, according to Freddie Mac.
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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