California home sales dipped slightly in November from a year ago, while the median sales price recorded its highest year-over-year gain since January 2016. The Bay Area had the strongest price appreciation among all regions with a 12.5 percent regional annual price increase. Realtor officials predict the lackluster sales performance and high price appreciation will continue if inventory remains at a low level.
According to information collected by the California Association of Realtors from more than 90 local Realtor associations and MLSs statewide, closed escrow sales of existing, single-family detached homes in the state totaled 440,340 units in November. The November sales figure was up 2.1 percent from October and down 0.8 percent compared with home sales in November 2016.
"The state's housing market performed better than we anticipated in November despite a slowdown in sales activity in the second half of the year," said Steve White, 2018 C.A.R. president. "While high-priced markets have performed well in recent months, sales remain lackluster in the lower-priced segments as the supply of affordable homes continues to shrink."
After reaching its highest level in a decade in August, the statewide median price was essentially flat from October. The $546,820 November median price was 0.1 percent higher than October's $546,430 price, but climbed 8.8 percent from the revised $502,490 recorded in November 2016.
"The statewide median home price increased year-over-year at the highest rate in nearly two years, which was faster than what we anticipated earlier in the year," noted C.A.R. senior vice president and chief economist Leslie-Appleton-Young.
The San Francisco Bay Area continues to reflect severe tight supply and low affordability market conditions. According to the C.A.R. report, month-over-month home sales dropped in four of the nine counties in the region. Sales in San Francisco and San Mateo counties grew slightly, while Marin and Napa had very strong gains of 20.6 percent and 22.5 percent, respectively. Sales in Sonoma County rebounded 25.2 percent from the October wildfires.
The four counties that reported monthly sales losses were Alameda, Contra Costa, Santa Clara, and Solano counties. Home sales in Santa Clara County were down 6.8 percent from October and down 7.8 percent from November 2016. Meanwhile, the November median sales price of a Santa Clara County single-family home rose 3.2 percent from $1,242,500 in October to $1,282,500 in November. The November median was 27 percent higher than $1,010,000, the median price in November last year.
"In the Bay Area, every county had fewer active listings from last year with declines of nearly 17 percent for the region and a 36 percent year-over-year decline in active listings in Santa Clara County," observed Denise Welsh, president of the Silicon Valley Association of Realtors. "The 27 percent median price increase from last year has hurt affordability."
With the Federal Reserve recently hiking its benchmark interest rate, there is concern that higher mortgage rates will exacerbate the affordability problem. "We expect more rate increases next year as the Fed attempts to keep inflation in check. As rates rise, the cost of homeownership will go up, and housing affordability will further deteriorate if the trend continues," said Appleton-Young.
According to Freddie Mac, the 30-year, fixed-mortgage interest rates averaged 3.92 percent in November, up from 3.90 percent in October and from 3.77 percent in November 2016. The five-year, adjustable-rate also ticked higher in November to an average of 3.24 percent from 3.18 percent in October and from 2.74 percent in November 2016.
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Variations of this article have appeared in local area newspapers.
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