Despite tight supply constraints and worsened affordability, California's housing market remained solid in July as it experienced gains year-over-year in both home sales and price. With the first half of the year over, Realtor officials anticipate an overall slowdown in sales and moderate growth in home prices for the rest of the year.
Existing, single-family home sales totaled 421,460 in July on a seasonally adjusted annualized rate, up 0.9 percent from July 2016, but down 4.9 percent from June. Year-to-date sales are 2.9 percent ahead of last year's pace, but are beginning to slow.
July's statewide median home price was $549,460, up 7.4 percent from July 2016, and down 1.1 percent from June. The July increase in home prices was faster than any month last year except January, suggesting that affordability is deteriorating at a faster rate, according to the report.
"As we enter the second half of the year, we are likely to see some slowdown in sales that extends beyond the typical seasonality change," said C.A.R. president Geoff McIntosh. "While the rate of closed sales indicates that California's housing market has continued to move forward, tight supply continued to push up prices and lower affordability, which can ultimately undermine the housing market by putting homeownership out of reach for too many households."
Overall year-to-year sales in the San Francisco Bay Area increased slightly and home prices rose significantly. In Santa Clara County, compared to the same month last year, July 2017 home sales were up 15.2 percent but down 13.3 percent from June 2017. The July median of $1,165,000 was 11.5 percent higher than the median of $1,045,000 in July 2016, and 1.5 percent lower than the June 2017 median of $1,182,500.
In its quarterly sales and price report, the National Association of Realtors found the five most expensive housing markets in the second quarter were the San Jose, California metro area, where the median existing single-family price was $1,183,400; San Francisco, $950,000; Anaheim-Santa Ana, California, $788,000; urban Honolulu, $760,600; and San Diego, $605,000.
"With the start of the schoolyear and the fall season, we anticipate the market to transition into the off-season trend," said Denise Welsh, president of the Silicon Valley Association of Realtors. "Mortgage rates are still very low, but few homebuyers can take advantage of the rates when inventory is at a critically low level."
The 30-year, fixed-mortgage interest rate in July averaged 3.90 percent, down from 4.01 percent in June, but higher than 3.57 percent in July 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates edged up in July to an average of 3.14 percent from 3.12 percent in June and was up from 2.78 percent in July 2016.
Unsold inventory for Santa Clara County was at 1.5 months in July, compared with 1.4 months in June and 2.5 months in July of last year. Normally, the average inventory is six months.
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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