Closed escrow sales of existing, single-family detached homes in California totaled 431,020 units in October, up 0.8 percent from the 427,460 level in September and down 3.4 percent compared with home sales in October 2016. The October home sales posted the first back-to-back annual sales decline in more than a year, according to the California Association of Realtors.
"As we enter the fall homebuying season, we're seeing signs of the market slowing as eroding affordability and persistently low housing inventory cut into home sales," said Steve White, the state Realtor group's 2018 president. "Moreover, the looming tax reform bill that eliminates important incentives that help first-time homebuyers and existing homeowners will only further adversely impact the housing market."
After reaching its highest level in a decade in August, the statewide median price of $546,430 dropped 1.6 percent from September's $555,410 median, but was 6.1 percent higher than the revised $515,170 recorded in October 2016.
"While October's year-to-year price gain was the lowest in five months, we're still seeing solid price increases, especially in the San Francisco Bay Area. In fact, 20 of the tracked counties recorded strong double-digit, annual price gains," said C.A.R. senior vice president and chief economist Leslie-Appleton-Young.
In Santa Clara County, October sales of existing single-family homes declined 5.7 percent from October 2016 and were down 7.1 percent from September 2017. Meanwhile, the October median home price in Santa Clara County was $1,242,500, 5.3 percent higher than the $1,180,000 September 2017 median and a whopping 18.6 percent higher than the median of $1,047,500 in October 2016.
According to C.A.R., the housing shortage is especially pronounced in the San Francisco Bay Area, where every county had double-digit declines in active listings compared with last year. Santa Clara County experienced a near-40 percent drop.
The October unsold inventory in Santa Clara County was 1.4 months, unchanged from September and down from two months in October 2016. The median number of days it took to sell a Santa Clara County single-family home in October was nine days compared with 10 days in September 2017, and 14 days in October 2016.
San Francisco had the highest price per square foot in October at $946/sq. ft., followed by San Mateo ($888/sq. ft.), and Santa Clara ($703/sq. ft.).
At a recent broker/manager meeting of Silicon Valley Association of Realtors, a panel of brokers remarked the housing shortage and rising home prices are the reality created by economic growth and the expansion of corporations and jobs in Silicon Valley. "This is an end destination. Why would anyone want to leave?" asked John Thompson, founder and chief operating officer of Intero Real Estate Service.
When asked their take on the 2018 market, Michael Repka, chief executive officer and general counsel of DeLeon Realty, said potential sellers and buyers are hesitant about making a move because of the tax reform issue. "Many are worried about the political environment and taxes," said Repka. "Once the tax issue is finalized, we will see more clarity and people will feel better."
Referring to C.AR.'s forecast for 2018, Nina Yamaguchi, managing broker of Coldwell Banker Residential Brokerage in Cupertino, expects low inventory and high home prices to continue and the mortgage interest rate to rise a bit. "Housing affordability will continue to be an overriding problem," said Yamaguchi.
"I don't know of any elevator that continues to go up. Eventually something's got to come down. If it (the market) cooled off and pulled back, it wouldn't be too bad," commented Thompson.
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.
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Variations of this article have appeared in local area newspapers.
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