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October home sales get scary, prices still a treat

October home sales get scary, prices still a treat

By Ron Trujillo / ron@calhomenews.com

Fewer available homes and the uncertainty of federal tax reform hurt sales in October, and even fast-rising home prices slowed during the first full month of fall.

Existing home sales inched up 0.8% in October compared to September, but were off 3.4% from a year ago, according to the California Association of Realtors. Home sales are up 1.7% for the first 10 months of the year compared to a year ago, but transactions are slowing since the first quarter.

“As we enter the fall home-buying season, we’re seeing signs of the market slowing as eroding affordability and persistently low housing inventory cut into home sales,” says CAR president Steve White, who took over the helm of the statewide association this month. “Moreover, the looming tax reform bill that eliminates important incentives that help first-time homebuyers and existing homeowners will only further adversely impact the housing market.”

The state’s median-home price – meaning half the homes sold for more, the other half for less – dipped 1.6% to $546,40 from September, but was up 6.1% compared to October 2016. Despite the decline, the home price has remained above $500,000 for eight consecutive months.

“We’re still seeing solid price increases, especially in the San Francisco Bay Area,” says Leslie Appleton-Young, CAR senior vice president and chief economist. “In fact, 20 of the tracked counties recorded double-digit annual price gains.”

Indeed, five Bay Area counties – Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara – enjoyed double-digit price gains compared to a year ago. Santa Clara County had an 18.6% increase, the largest of the major counties in the state.

San Francisco is the priciest county at $1.59 million, followed by San Mateo at $1.52 million and Marin at $1.25 million.

Lassen County in Northern California was the most affordable market at $160,000 – or less than one-third the statewide median price. (You can check county-by-county sales and price information on the CAR website.)

The biggest challenge for the market remains a lack of inventory. Active listings dropped 11.5% in October compared to a year ago, following a longstanding trend. Active listings have plummeted 10% every month compared to the prior year since 2015.

With the declining inventory, there were only three months of available homes on the market in inventory in October, based on the current sales pace. The figure compares to 3.2 months in September and 3.4 months in October 2016.

Feature photo of Simi Valley homes by Trekandshoot/Shutterstock.

San Francisco

$1.59 million, up 13.3% from a year ago

Santa Cruz

$867,000, up 8.4%

Santa Barbara

$653,000, up 9.7%

Napa

$649,000, up 5.0%

San Diego

$603,000, up 4.6%

Los Angeles

$580,360, up 8.1%

Sacramento

$349,900, up 9.3%

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