Home sales bounced back in September, as lower mortgage rates helped lure more on-the-fence consumers to make offers and become owners.
An adjusted annualized rate of 277,410 homes sold in September, a 5% increase from August and up 6.6% from a year ago, according to the California Association of Realtors.
The better-than-expected sales follow a rather disappointing spring and homebuying season and ends five months of annual declines. However, home sales have remained below the 300,000 level for the past three years, often considered the minimum benchmark of a healthy housing market.
‘A SMALL BOOST HEADING INTO THE FOURTH QUARTER’
All seven regions of the state enjoyed annual sales gains, with four posting double-digit increases, including an impressive 11.8% along the Central Coast, from Santa Barbara to Santa Cruz counties.
“It’s great to see that home sales bounced back in September to their highest level in seven months as mortgage rates hit their lowest point since last October,” said Heather Ozur, a Palm Springs REALTOR. “Even though rates have inched up a bit, they’re still in the low 6% range, which should help keep the market steady through the end of the year.”
The Federal Reserve’s latest rate cut likely helped lower rates, but mortgage lenders have also been responding to increase sluggish sales.
“Steady mortgage rates may give demand a small boost heading into the fourth quarter, but broader economic uncertainty, like the ongoing government shutdown and renewed U.S-China trade tensions, will likely keep the recovery gradual.”
California’s economy has slowed and is “treading water” and could experience a recession, said Mark Zandi, chief economist for Moody’s Analytics. And the state’s jobless rate is among the highest in the U.S.
PRICES FALL TO THE LOWEST IN SEVEN MONTHS
But some buyers are shrugging off the economic and job-market worries and buying homes – often at a slight price drop from just a few months ago.
The state’s median-home home price was $886,340 in September, down 1.7% from August – and the lowest price in seven months, according to CAR. However, the current price is up 1.8% from a year ago.
Six of the seven regions had price gains, with the Far North – Chico to Eureka – leading the way at 2.9%. The Central Valley, from about Bakersfield to Stockton, had the only drop at a miniscule 0.25%.
Nine counties had a median-home price of at least $1 million in September, including five in the Bay Area, with San Mateo and Santa Clara counties leading the way at $2.15 million and $2 million, respectively.
Home prices and sales in September compared to a year ago
| Region | Median home price | % gain or loss vs. a year ago | Home sales vs. a year ago |
|---|---|---|---|
| California | $883,640 | +1.8% | +6.6% |
| Bay Area | $1.3 million | +2.7% | +9.8% |
| Central Coast | $1.05 million | +1.2% | +11.8% |
| Central Valley | $499,000 | -0.2% | +10.2% |
| Far North | $390,500 | +2.9% | +8.0% |
| Inland Empire | $591,010 | +3.6% | +1.9% |
| Los Angeles | $750,000 | +1.9% | +10.6% |
| Southern California | $869,250 | +2.3% | +2.3% |
Source: California Association of Realtors
