June home sales and prices in California continued to record strong gains on a monthly and annual basis for the second consecutive month. Homebuilders say new homebuyers are helping boost the economy when they make improvements to personalize their homes.
Closed escrow sales of existing, single-family detached homes statewide remained above the 400,000 benchmark for the 15th consecutive month, totaling 443,150 units in June, according to the California Association of Realtors (C.A.R.). The June figure was up 3.3 percent from May and up 2.4 percent compared with June 2016 home sales. Year-to-date sales are running 3.2 percent ahead of last year's pace.
A lack of available homes for sale continues to be the largest single factor influencing California's housing market. "With active listings 13.5 percent lower than last June, we've now experienced a full two years in which active listings have fallen on a year-over-year basis and the lowest inventory level this year," said C.A.R. president Geoff McIntosh
The statewide median price was up 0.9 percent from a revised $550,080 in May to $555,150 in June. The median was 7 percent higher than the revised $518,830 recorded in June 2016.
"While June home sales improved at a healthy pace, the growth in sales was primarily in the mid- to higher-end price ranges. In fact, sales in the lower price ranges were down significantly as a tight supply of affordable homes continues to plague the market and impede the sales of starter homes," observed Leslie Appleton-Young, C.A.R. senior vice president and chief economist.
In Silicon Valley, MLSListings Inc., the local multiple listing service provider for the counties of Monterey, San Benito, San Mateo, Santa Clara and Santa Cruz, reports year-over-year home sales rose 14 percent in San Mateo County and 13 percent in Santa Clara County. Compared to May, home sales rose 11 percent in San Mateo County and 9 percent in Santa Clara County.
The June median price of a single-family home in Santa Clara County was $1,165,000, 11 percent more than $1,050,000 in June 2016. The June median was 2 percent lower than the May median of $1,190,000.
"The increased sales are due to low unemployment, low interest rates and solid demand. The statistics are the best we have seen since 2001 and have boosted consumer optimism about the housing market," said Denise Welsh, president of the Silicon Valley Association of Realtors. "The millennials have entered the marketplace and they are competing with the baby boomers who are downsizing. It is a great time to sell, particularly for baby boomers, who are thinking of leaving the area or have another home to move to."
"Homebuying has boosted many sectors of the economy," remarked Welsh.
According to a new consumer spending analysis from the National Association of Home Builders (NAHB), in their first year of ownership, new homebuyers spend about $10,601 on appliances, furnishings and home improvement projects, 2.6 times as much as other homeowners in a typical year. The study further indicates during the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a non-moving homeowner.
NAHB Chairman Granger MacDonald said in the report that the impact of new owners is noticeable and vital to the health of the housing market and overall state of the economy. "It's the architects, the heating technicians, the lumber suppliers. And it's the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home," said MacDonald.
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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