After rebounding in May, California home sales fell below the 400,000 unit benchmark in June, declining from both the previous month and year. The San Francisco Bay Area saw a 10 percent decline in month to month sales and an 8.8 percent decrease from last year.
The California Association of Realtors reports closed escrow sales of existing, single-family homes in California totaled 389,690 units in June, down 4.2 percent from May and down 5.1 percent from home sales in June 2018. Sales have been under the benchmark for 10 of the past 11 months.
Despite the drop in sales, Realtor officials see improvement in the market for prospective homebuyers, as home prices cool and interest rates remain low. "With softer price growth and interest rates at the lowest levels in nearly three years, monthly mortgage payments on a median-priced home have fallen for four straight months. This allows homebuyers to save hundreds of dollars a month on the same home or to potentially consider a slightly more expensive home for the same monthly cost," said C.A.R. President Jared Martin. "Combined with the long-term benefits of homeownership on personal wealth and quality of life, 2019 is a good time to purchase a home for the long haul."
The C.A.R. report indicates while the median price set another record in June, the increase was tempered. June's median price was $611,420, essentially unchanged from $611,190 in May and up 1.4 percent from $602,770 in June 2018.
In the San Francisco Bay Area, only Napa County had a sales increase of 19.2 percent. Sales were essentially flat in Sonoma County and the other seven counties experienced declines ranging from the low single-digits in Marin to a 21 percent dip in San Francisco.
The Bay Area saw an 8 percent decline in median home prices from a year ago and a 3 percent decline from May. Only San Francisco County recorded a solid 8.8 percent year-over-year price increase, while elsewhere in the region, prices followed the statewide trend of cooling price growth.
In Santa Clara County, June home sales were down 14.4 percent from May and down 14.6 percent from June 2018. The June median sales price was $1,350,000, a 1.1 percent increase from $1,335,000 in May and 3.6 percent lower than the median of $1,400,000 in June last year.
San Mateo County saw home sales decline 6.4 percent from May and down 8.2 percent from June 2018. The county's June median sales price of $1,620,000 was 8.3 percent lower than the May median of $1,766,500 and 1.8 percent lower than the median of $1,650,500 a year ago.
"Real estate is a cycle. When home prices were rising too quickly, impacting affordability, buyers retreated, causing sales to fall," said Alan Barbic, president of the Silicon Valley Association of Realtors. "The market today is very different from a couple of years ago and working with an experienced agent, sellers need to realistically set their prices based on the current market. If priced correctly, a home will sell quickly in the Bay Area, due to the strong demand."
The monthly MLSListings data report indicated "power is slowly shifting from sellers to buyers." The MLS provider's partner economist Elliot Eisenberg expects continued price deceleration and, in some cases, mild price depreciation for the next year, even as inventories remain tight and the economy strong.
The 30-year, fixed-mortgage interest rate averaged 3.8 percent in June, down from 4.57 percent in June 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.48 percent, compared to 3.82 percent in June 2018.
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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