Home sales rebound in February, small price gains
‘Market will likely remain constrained’
A dramatic boost in homes on the market and the lowest mortgage rates in more than a year helped sales rebound in February, giving some much-needed hope to the always important spring home-buying season in California.
Home sales reached an annualized rate of 399,080 units in February, an 11.3% increase compared to January — but down 5.6% from a year ago, according to the California Association of Realtors. The annual decline in home sales was the slowest since July 2018, when the once red-hot market started to cool.
“While February’s sales rebound is welcome news, the market will likely remain constrained as sellers and buyers sort through the realities of today’s market,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “With the market about to kick off its home-buying season, buyers have a window of opportunity in the coming months as interest rates remain stable, there are more properties on the market to consider and prices are more attractive.”
Bay Area prices sliding
Would-be buyers are enjoying more homes on the market, a 19.2% increase from a year ago, but still face hefty home prices. February’s median-home price — meaning half the homes sold for more, the other half for less — dipped 0.6% to $534,140 compared to January, but up 2.2% from February 2018.
But there are definitely markets where prices are struggling. Four Bay Area counties — Napa, San Francisco, San Mateo and Santa Clara — endured double-digit declines in home prices compared to February 2018. Of course, the Bay Area continues with the highest-priced counties, with San Francisco at $1.51 million leading the way. San Mateo, Marin and Santa Clara also topped the $1 million mark.
Would-be buyers ‘get off the fence’
Lassen County in Northern California is the most affordable county in the state at $185,000, a 34% plunge from $280,000 a year ago. The dramatic drop was the largest in the state.
“Lower rates and stabilizing home prices motivated would-be buyers to get off the fence in February,” says CAR president Jared Martin. “With mortgage rates reaching their lowest point in a year, housing affordability improved as buyers’ monthly mortgage payments became more manageable.”
Home prices, sales compared to a year ago
$1.51 million, down 13%; sales up 8.9%
$645,000, down 14.6%; sales down 1.2%
$625,000, up 3.3%, sales down 4.7%
$541,390, up 2.7%; sales down 10.9%
$360,000, up 2.9%; sales down 11.4%
Active listings increased 19% in February compared to a year ago, and have now risen 11 straight months.
Those listings would take about 4.6 months to sell, compared to 3.9 months in February 2018.
Time on the market
The average home on the market sold in 33 days in February vs. 22 days a year ago.