CAR: Housing market springs back in March
Lower mortgage rates give
‘would-be buyers the confidence to enter the housing market’
Spring brought some much-needed life to the sluggish housing market in March, thanks to the lowest mortgage rates in more than a year and the smallest increase in home prices since 2012.
Home sales reached an annualized rate of 397,210 units in March, down 0.2% from February and off 6.3% from a year ago, according to the California Association of Realtors. Despite the decline, the figures were much better compared to the past several months, when sales stalled, as would-be home buyers balked at near-record prices and many home-sellers were reluctant to lower their expectations.
‘Brighter market outlet could be in place in the second quarter’
“The lowest interest rates in more than a year gave would-be buyers the confidence to enter the housing market and provide a much-needed push to jump-start the spring homebuying season,” says Jared Martin, president of CAR. “Pending sales also showed strong sales in March, which suggests a brighter market outlook could be in place in the second quarter.”
The statewide median-home price increased 5.9% to $565,880 in March compared to February, up a modest 0.2% vs. a year ago. But the current price is the highest point since October 2018, and generating some optimism for the spring and summer.
Smaller price gains are bad for home-sellers, but good news for home shoppers, especially as mortgage rates remain at the lowest levels since early 2018 — 4.27% vs. 4.44% a year ago, according to Freddie Mac.
Bay Area, Santa Barbara home prices plunge
“The median price has been softening since it reached a peak last summer, and March’s year-over-year price increase was the smallest in seven years,” says Leslie Appleton-Young, senior vice president and chief economist for CAR. “The flattening home prices, coupled with low mortgage rates, bode well for housing affordability and may bring more buyers who may have given up back to the market.”
The Bay Area continues with the highest-priced homes, led by almost $1.64 million in San Francisco. Three other Bay Area counties topped the $1 million mark, according to CAR. But the region’s home prices are definitely taking a hit, with Santa Clara’s median-home price falling 10.5% compared to a year ago.
Santa Barbara County — one of the more volatile housing markets with fewer homes selling — had the largest one-year decline in prices, plummeting 20.5% to $555,000. However, home sales from Carpinteria to Santa Maria improved 3.5% from a year ago, and soared 49.1% compared to March 2019.
Siskiyou County was the lowest-priced region at $220,000, while Tulare County — Visalia, Tulare and Porterville — had a price of $230,000 in March, the lowest among larger counties in the state.
Home prices, sales compared to a year ago
$1.64 million, down 2.5%; sales down 11%
$809,500, down 1.8%; sales down 12.5%
$579,000, down 7.4%; sales down 13.7%
$525,520, down 0.7%; sales down 13%
$280,000, up 5.7%; sales down 12.5%
Active listings jumped 13.8% in March compared to a year ago, and have now increased 12 straight months.
Those listings would take about 3.6 months to sell, compared to 2.9 months in March 2018.
Time on the market
The average home on the market sold in 25 days in March vs. 16 days a year ago.