California home sales showed healthy gains in February on both a monthly and annual basis after a weak start in January, according to the California Association of Realtors' latest report. The year-to-year increase was the largest since March 2017, and the month-to-month increase was the largest since June 2017. Home prices continued to grow at a strong pace, as well.
Closed escrow sales of existing, single-family detached homes in the state totaled 422,910 units in February, according to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide. February's sales figure was up 3.3 percent from the revised 409,520 level in January and up 5.4 percent compared with home sales in February 2017 of a revised 401,060.
"February's solid market performance was likely fueled by rising interest rates, which motivated buyers to rush in and close escrow before rates move even higher as they're anticipated to do in the coming months," said Steve White, president of the state Realtor group.
The Bay Area posted the largest sales gain, a 7.1 percent increase from February 2017. Sales increased in eight of nine Bay Area counties, with Contra Costa (11.2 percent), Napa (18.2 percent), and San Mateo (16.1 percent) all increasing by double digits. Santa Clara County posted a 5.7 increase from last year.
February's statewide median price of $522,440 was down 1 percent from January's $527,780 and was 8.8 percent higher than the revised $480,270 in February 2017. The year-over-year price gain has been growing at or above 7 percent for eight of the past nine months.
Home prices across the state continued to grow in general, especially in the San Francisco Bay Area, where the regional median price increased 13.9 percent over last year. Seven of the nine Bay Area counties posted double-digit annual increases and five of these counties surpassed their previous peak prices. They included San Francisco, San Mateo, Marin, Santa Clara, and Sonoma counties whose median price hit $1,730,000, $1,610,000, $1,371,000, $1,383,500, and $689,000, respectively.
"There's no question that the market continues to be strong here because of the high demand and severe lack of inventory. With fewer homes up for sale, the competition among buyers is steep," said Bill Moody, president of the Silicon Valley Association of Realtors. "Buyers are aware that interest rates will edge higher and they don't see prices declining, not with the housing shortage. When you have homes priced at over a million dollars, every percentage increase in the interest rate brings the mortgage payment up higher for the homebuyer."
Mortgage rates have been on the rise since breaking the 4 percent barrier in January. The 30-year, fixed-mortgage interest rates averaged 4.33 percent in February, up from 4.03 percent in January and from 4.17 percent in February 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also edged higher in February to an average of 3.60 percent from 3.47 percent in January and from 3.24 percent in February 2017.
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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