The California Association of Realtors reports the tight housing supply held back California home sales in December, despite the lowest interest rates in years. Meanwhile, the December median home price jumped over 10 percent, the second highest of the year and the largest year-over-year increase since May 2014.
Sales ofexisting, single-family homes totaled 398,880 in December, down 1 percent from November, marking the first time in six months that sales fell below the 400,000 benchmark. Sales were up 7.4 percent from December 2018's revised figure of 371,410. For 2019 as a whole, sales of existing statewide homes were down 1.2 percent from 2018.
"Looking ahead, low rates should continue to provide support to the market as buyers have become more motivated to get back into the market, and home sales in California should see an improvement at the start of the year," said Jeanne Radsick, 2020 C.A.R. president.
The 30-year, fixed-mortgage interest rate averaged 3.72 percent in December, down from 4.64 percent in December 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.39 percent, compared to 4.02 percent in December 2018.
December's statewide median price of $615,090 was up 4.3 percent from November's median of $589,770 and 10.3 percent higher than the December 2018 median of $557,740. The year-over-year price increase was the first double-digit price increase in more than five years. The statewide median home price for the year was $592,450, an increase of 4 percent from a revised $569,480 in 2018.
Sales rose on both a monthly and annual basis in all major regions. On a yearly basis, sales in the San Francisco Bay Area rose 16 percent. Median prices increased from last year in all regions, with Bay Area prices up 6.9 percent.
In all five MLSListings counties of San Mateo, Santa Clara, Santa Cruz, Monterey and San Benito, the number of homes sold in December 2019 saw double-digit increases from December 2018, while inventory was down across the board. New listings also fell in all five counties. The actual price paid versus list price hovered around 100 percent in every county, from a high of 102 percent in San Mateo to 97 percent in Monterey.
The local MLS reports in Santa Clara County, December closed sales dropped 7 percent from November, from 736 to 686, and were 18 percent higher than sales in December 2018. The median single-family home cost $1,220,500 and sold in 21 days for 100 percent of the list price based on 686 sales in December 2019. Inventory was down 46 percent from November, and down 35 percent from December 2018. There were 539 homes available in December 2019 compared to 829 homes the previous year. The number of new listings for December decreased 44 percent over November, and was down 5 percent from December 2018.
"Going into the new year we're looking at very tight housing inventory and fierce competition from serious buyers looking to purchase a home while the interest rate is at a record low," said Mary Kay Groth, 2020 president of the Silicon Valley Association of Realtors. "Silicon Valley's housing market continues to remain strong, but there is just not enough housing to meet the demand. We continue to press our state legislators to make housing supply a priority in 2020. Increasing the housing supply is the best solution to our housing crisis, albeit not a quick fix, and to make the dream of homeownership a reality for thousands of Californians who need affordable housing."
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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