Home sales slide, prices surge in November
By Ron Trujilloemail@example.com
A dramatic decline of homes available on the market stalled sales but pushed prices higher in November, just as consumers weigh concerns about higher interest rates and much-stricter federal tax credits.
California had an annualized rate of 440,340 homes selling in November, a 2.1% increase compared to October and down 0.8% from a year ago, according to the California Association of Realtors. Home sales are up 1.5% for the first 11 months of the year, compared to the same period in 2016 – but sales have been stalling since the first quarter of the year.
And many of the sales are coming from higher-priced regions such as the Bay Area, while lower-priced markets are starting to struggle. For example, existing home sales jumped 38.5% in Marin County and 18.5% in San Francisco in November compared to a year ago, but the Los Angeles and Inland Empire (Riverside and San Bernardino counties) reported drops of 3.5% and 6.2%, respectively.
“The state’s housing market performed better than we anticipated in November, despite a slowdown in sales activity in the second half of the year,” says CAR president Steve White. “While high-priced markets have performed well in recent months, sales remain lackluster in the lower-priced segments as the supply of affordable homes continues to shrink. This tale of two markets is not a story that we enjoy telling as the dichotomy in the market is posing some affordability challenges to many potential homebuyers who want to enter the market.”
The median-home price – meaning half the homes sold for more, the other half for less – remained above the $500,000 mark for the ninth-consecutive month in November. The current price of $546,430 inched up 0.1% compared to November – and an impressive 8.8% from a year ago, the largest year-over-year increase since January 2016.
“The statewide median home price increased year-over-year at the highest rate in nearly two years, which was faster than what we anticipated earlier in the year,” says Leslie Appleton-Young, CAR senior vice president and chief economist. “With the Federal Reserve hiking its benchmark interest rate … we expect more rate increases next year as the Fed attempts to keep inflation in check. As rates rise, the cost of homeownership will go up, and housing affordability will further deteriorate if the trend continues.”
Fewer than 30% of California households could afford the median-priced home during the first quarter, and the one-two punch of fast-rising prices coupled with little inventory are having a huge effect on the market.
The state had only 2.9 months of housing inventory in November, compared to 3.0 months in October – and 3.1 months in November 2016. With an abundance of qualified buyers and few homes available to purchase, the number of days on the market fell to 22, compared to 30 days in November 2016.
And most homes are selling close to their asking price – about 98.9% in November, compared to 98.2% a year ago.
The Bay Area, as always, boated the highest-priced markets, with San Francisco County leading the way at $1.5 million followed by San Mateo County’s $1.49 million.
Lassen County is the most affordable market at $189,000, followed by neighbor Siskiyou County at $189,500.
Around the state (Nov. price vs. a year ago)
$1.5 million, up 10.3%
$785,000, up 6.9%
$619,900, up 11.3%
$349,900, up 7.7%
$264,000, up 10.9%