California's housing market continued to improve in August as home sales climbed to their highest level in more than a decade and the median home price broke July's record and hit yet another high, according to the California Association of Realtors. The San Francisco Bay Area and Central Coast had the strongest sales growth and highest median price increase from last year.
Closed sales of single-family homes in the state totaled 465,400 units in August. This was the first time since the summer of 2016 that sales increased from the previous month three months in a row. August sales rose 6.3 percent from 437,890 in July and were up 14.6 percent from a year ago, when 406,100 homes were sold.
"California's strong housing recovery in terms of sales and price over the past few months is encouraging as motivated buyers are eager to purchase homes amid the lowest interest rates ever, which led to the fastest sales growth in a decade," said 2020 C.A.R. President Jeanne Radsick. "However, persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which will outweigh the benefits of record low interest rates and hamper housing affordability."
Sales of higher-priced properties are recovering faster than the rest of the market. After setting records in June and July, the statewide median price hit $706,900 in August, another new high. This was a 6.1 percent jump from July's $666,320 and 14.5 percent from $617,410 in August 2019. The yearly price increase was the highest recorded since March 2014.
The 30-year, fixed-mortgage interest rate averaged 2.94 percent in August, down from 3.62 percent in August 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 2.91 percent, compared to 3.36 percent in August 2019.
August home sales in Santa Clara County were 8.2 percent higher than sales in August 2019, but down 7 percent from July. Santa Clara County's median price in August was $1,400,000, 17.6 percent higher than the August 2019 median price of $1,190,000 and up 1.4 percent from July's median of $1,380,000.
"Due to the low inventory and strong demand, in Santa Clara County days on market are down to the single digits, just nine days in August compared to 10 days in July and 18 days in August of last year," said Mary Kay Groth, president of the Silicon Valley Association of Realtors. "It shows despite the pandemic, homes are selling quickly. Buyers have to make the decision on whether or not to purchase a home within a few days."
Groth, who is a Realtor with Sereno Group Los Gatos, noted, "The recent wildfires and smoke may have affected market activity. It's been difficult to take pictures of homes for sale and some showings were postponed due to the smoke that enveloped the region. We'll have to see the impact the situation may have on the market once this month's housing data is tallied."
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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