California existing home sales edged up in May, rising above the 400,000 benchmark level for the third straight month, while strained housing supply continued to push prices higher according to the California Association of Realtors (C.A.R.).
Closed escrow sales of existing, single-family detached homes in California totaled 410,090 units in May, according to information collected by C.A.R. from more than 90 area realtor associations statewide.
The May figure was up a slight 0.6% from the level in April and down 3.2% compared with home sales in May 2015 of a revised 423,700. The year-to-year decline was the first back-to-back sales decline since November 2014.
“While May home sales edged up slightly, we are seeing a moderation, driven by tight housing inventory and reduced affordability,” said C.A.R. President Pat “Ziggy” Zicarelli. “Affordable areas, such as the Inland Empire and Central Valley, where housing supply is relatively more abundant, are outperforming the San Francisco Bay Area, where thin housing availability is hampering home sales.”
Median price raised 17% in Mountain Area
May was also another good month for home sales in the Mountain Area according to Oakhurst Realtor Ed Bailey.
“We sold 56 single family homes through our local Multiple Listing Service (MLS), the same number as last year, but at a 17% higher median price of $259,750 compared to $221,500 last year,” Bailey said. “So far for this month, as of June 17, we had sold 39 homes with the median price running 6% over last year, at $275,000. We had 303 active home listings at the end of last week, with only 17 of them being distress sales (bank owned and short sales). We had 75 in escrow with a median asking price of $259,900.”
Bailey said that of the current 303 active listing, 25 of them are priced under $200,000, and interest rates continue to be amazingly low.
“This may be a good time for renters to stop paying rent, and start acquiring some equity in a home of their own,” Bailey said.
At the state level, a change in the mix of sales and a continued mismatch between supply and demand pushed the median price of an existing, single-family detached California home 1.8% higher in May to $518,760 from $509,590 in April. May’s median price was 6.3% higher than the $487,960 recorded in May 2015. The median sales price is the point at which half of homes sold for more and half sold for less, and is influenced by the types of homes selling as well as a general change in values. May marked the second consecutive month that the median price was above $500,000 - still below the pre-recession peak of $594,530 reached in May 2007.
“The California housing market is growing modestly so far this year, with home sales running 2% higher year to date,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Fundamental drivers, such as household formation and economic growth will continue to move housing demand forward. However, constrained inventory, low affordability, and regional disparities will be a drag on this year’s market outlook, which is forecast to see a 1.3% growth in sales and a 5% increase in the median home price.”
The average price per square foot for an existing, single-family home statewide was $249 in May 2016, up from $244 in April and $238 in May 2015.
San Francisco County had the highest price per square foot in May at $856, followed by San Mateo ($826), and Santa Clara counties ($638).
The counties with the lowest price per square foot in May include Siskiyou ($121), Madera ($123), and Plumas ($125).
Mortgage rates were essentially flat in May, with the 30-year, fixed-mortgage interest rate averaging 3.60%, compared with 3.61% in April and 3.84% in May 2015, according to Freddie Mac. Adjustable-mortgage interest rates slipped, averaging 2.81% in May, down from 2.83% in April and 2.89% in May 2015.
California Association of Realtors