Home sales drop, prices reach new record in June
Bay Area, Los Angeles, Central Valley sales plummet
Despite an abundance of homes on the market and the lowest mortgage rates in about three years, existing home sales dropped in June — and fell below a closely watched benchmark for a strong market for the 10th time in 11 months.
Single-family home sales dropped to a seasonally adjusted 389,690 units in June, a 4.2% decline from May and off 5.1% from a year ago, according to the California Association of Realtors. The seasonally adjusted figure is based on if the current sales clip continued for a 12-month period.
Affordability remains a major concern, prompting some would-be buyers to hold off making a purchase during the past several months. The unsold inventory index has climbed to 3.4 months, compared to 3.0 months a year ago, and the median time on the market was 19 days vs. 15 days a year ago.
Sales declined in all five regions compared to a year ago, including more than 8% in the Bay Area, Los Angeles and the Central Valley, from Bakersfield to Sacramento.
Lower rates: ‘Homebuyers to save hundreds of dollars a month’
Real estate experts say those looking to buy should make a move soon.
“With softer price growth and interest rates at the lowest levels in nearly three years, monthly mortgage payments on a median-priced home have fallen for four straight months,” says CAR president Jared Martin. “This allows homebuyers to save hundreds of dollars a month on the same home or to potentially consider a slightly more expensive home for the same monthly cost. Combined with the long-term benefits of homeownership on personal wealth and quality of life, 2019 is a good time to purchase a home for the long haul.”
And home prices, even with more homes on the market, continue to increase, reaching a record $611,420, basically unchanged from May and up a modest 1.4% from June 2018.
The Bay Area, as always, remains the most expensive region, with San Francisco leading the way at a record $1.76 milion, an 8.8% increase from a year ago. Three other counties — Marin, San Mateo and Santa Clara — were $1.35 million or more. San Francisco’s price gain was the largest among major counties in the state.
Lassen County was the most affordable housing market in the state at $215,000.
Revised, improved outlook for second half
CAR has revised its market outlook for the second half of the year, with home sales expected to reach 385,460 units, about 10,300 more than previously. And the median-home price should increase to $593,000, from the $568,800.
“With low rates supporting sales and elevating home prices in the last few months, the market outlook has shown some improvement since the first quarter,” says Leslie Appleton-Young, senior vice president and chief economist for CAR.
Home prices, sales compared to a year ago
$1.76 million, up 8.8%; sales down 21.1%
$665,000, up 12.3%; sales down 12.5%
$640,500, up 1.3%; sales down 18.1%
$599,680, up 2.3%; sales down 12.6%
$390,000, up 4.0%; sales down 12.7%
Active listings inched up 2.4% in June compared to a year ago, the smallest increase since April 2018.
Those listings would take about 3.4 months to sell, compared to 3.0 months in June 2018.
Time on the market
The average home on the market sold in 19 days in June vs. 15 days a year ago.