California home prices reached a new high in May for the first time in more than 10 years, according to the California Association of Realtors. Meanwhile, May home sales were down monthly and on an annual basis, due in part to the spike in interest rates in mid-April, according to state Realtor group officials.
Closed escrow sales of single-family detached homes statewide totaled 409,270 units in May, down 1.8 percent from the revised 416,750 units in April and down 4.6 percent compared with 428,870 home sales in May 2017. May marked the first year-over-year sales decline in four months and the lowest sales level in more than a year,
"Homebuyers may have postponed escrow closings to wait out the effects of the rate surge. Additionally, the specter of rate increases earlier in the year may have pulled sales forward into the first quarter, which resulted in the subpar performance in the last couple of months," said C.A.R. president Steve White.
The statewide median home price of $600,860 in May surpassed its previous peak price of $594,530, which was recorded during the last housing boom. The May median price was 2.8 percent higher than the April median of $584,460 and up 9.2 percent from a revised $550,230 in May 2017. The year-over-year price growth pace was the highest rate of growth since May 2014.
The San Francisco Bay area outperformed the rest of the state, making up a larger share of home sales and rapidly rising prices. Sales in the Bay Area recorded both solid month-to-month and year-over-year sales gains, rising 17.3 percent monthly and 2.1 percent annually. Five of nine Bay Area counties posted year-over-year sales gains, with San Francisco increasing by double-digits, while Napa, Sonoma, Santa Clara, and Solano counties experienced annual sales declines.
The Bay Area's median price spiked 16.4 percent from $935,000 in May 2017 to $1,088,000. In fact, the median price for the region remained above the $1 million benchmark for the second straight month and set a new record high. Five of the nine Bay Area counties had a median price above $1 million in May 2018, namely San Francisco ($1,620,000), San Mateo ($1,600,000), Marin ($1,415,000), Santa Clara ($1,400,000) and Alameda ($1,025,000),
The number of statewide active listings improved for the second consecutive month, increasing 8.3 percent from the previous year. The year-over-year increase was the largest since January 2015, when active listings jumped 11.0 percent.
"More homeowners are listing their homes for sale to take advantage of surging home prices, said Bill Moody, president of the Silicon Valley Association of Realtors. "They realize further rate increases are expected to hamper affordability and limit how much homebuyers are willing to pay for their new home."
Moody shared latest data on market inventory in Santa Clara County. He indicated as of June 25, there were 1,523 active listings in Santa Clara County, compared with 1,401 the previous week. Average inventory has jumped from 897 homes in April to 1,175 in May.
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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