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August home sales solid, prices at the highest level in a decade

August home sales solid, prices at the highest level in a decade

By Ron Trujillo/ron@calhomenews.com

An abundance of buyers clamoring for too-few homes on the market helped boost prices and sales in August, the latest evidence of a still-rather robust housing market.

August sales climbed to an annualized rate of 427,630 homes, a 1.5% increase compared to July and up a modest 1.3% from a year ago, according to the California Association of Realtors. Homes sales remained above the all-important 400,000 mark for the 17th consecutive month.

Home sales remain strong despite a dramatic decline of homes on the market. The unsold inventory dropped to 2.9 months in August, down from 3.2 months in July and 3.4 months in August 2016.

Geoff McIntosh

“While August’s strong housing market performance is encouraging, it’s really a tale of two markets,” says CAR president Geoff McIntosh. “Despite sales growth across all segments of the market, lower-priced homes are particularly inventory-constrained, which leads to weaker sales growth, faster-rising prices and fierce competition for the few homes that are listed. These homes are selling faster than historically and for top dollar, adversely impacting entry-level buyers who are already struggling to afford to buy their very first home.”

Indeed, the state’s median-home price – meaning half the homes sold for more, the other half for less – climbed to the highest level in a decade. August’s median-home price reached $565,330, a 2.9% increase compared to July – and up 7.2% from August 2016.

Inland Empire (Riverside and San Bernardino counties) home prices increased 8.2%, while the Bay Area jumped 6.5% during the past year. Los Angeles metro home prices improved a more modest 4.4%.

Leslie Appleton-Young

“A shortage of available homes for sale continues to stoke robust growth in home prices,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “August marked the third straight month that the median price gained 7% or more year-over-year, indicating that prices are not only growing but are accelerating into the end of the year. For the most inventory-constrained segment of the market – the bottom 20 percentile – home prices rose even higher with a double-digit gain (10.7%).”

The Bay Area continues to dominate the top-of-the-price market, with four counties above the $1 million mark. San Francisco County is the priciest market at $1.380 million, followed closely by San Mateo and $1.375 million. Marin and Santa Clara counties finished in third and fourth place at $1.21 million and $1.15 million, respectively.

Del Norte County is among the smallest counties in the state – and boasts the smallest price at $214,900.

Moving fast

The average home entered escrow in 18 days in August, slightly more than the 16 days in July – and 28 days in August 2016.

Show me the money

The sales price-to-list price ratio was 99.5% in August, compared to 100% in July and 98.9% in August. San Francisco had the highest ratio at 114.8% — meaning a home that was listed for $1 million, sold for almost $1.15 million.

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