California home sales up in November
Following last year’s new mortgage industry regulations that delayed some escrow closings, double-digit annual sales increases across every major region of the state propelled California existing home sales higher in November on a year-over-year basis, the California Association of Realtors (C.A.R.) reported on Dec. 19.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 442,320 units in November, according to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2016 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The November figure was down 0.1 percent from the 442,970 level in October and up 17.7 percent compared to home sales in November 2015 of a revised 375,850. Home sales remained above the 400,000 pace for the eighth straight month, and were up year-over-year for the third consecutive month. The seasonally-adjusted annualized sales figure was the third highest level since December 2012, and the year-over-year increase was the largest since 2009, when first-time home buyer tax credits fueled home sales.
C.A.R. President Geoff McIntosh credited the increase to Consumer Financial Protection Bureau’s implementation of Know Before You Owe TILA-RESPA Integrated Disclosure (TRID) last October.
“Additionally, near-universal expectation of the Federal Reserve’s rate increase may have given many buyers a sense of urgency to get into the market before rates rise further.”
Many, if not most, of these closed sales would have been under contract prior to the presidential election, so the sales increase cannot directly be attributed to the effect of the election or the subsequent rise in rates that followed immediately afterward.
The statewide median price decreased for the third straight month but remained above the $500,000 mark for the eighth consecutive month. The median price of an existing, single-family detached California home was down 2.3 percent in November at $501,710 from a revised $513,520 in October.
November’s median price increased 4.9 percent from the revised $478,140 recorded in November 2015. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values. The monthly price decline is primarily due to seasonal factors.
In El Dorado County, the median sold price for an existing single-family home in November was $442,000 — a 5.5 increase compared to the October median sold price and a nearly 12 percent increase compared to the $394,950 median sold price in November 2015.
“The Federal Reserve’s announcement last week to raise the federal funds rate has been anticipated and should only have a minor, if any, adverse impact on the housing market in the next couple of months since rates are still historically low. Yet, future rate hikes will further increase the cost of a mortgage, which could impact home sales in 2017 and beyond,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Moreover, with the specter of rates drifting higher, more buyers may rush in to buy homes and compete for a dearth of homes available for sale, which could put upward pressure on home prices and lead to a further decline in affordability.”
Other key points from C.A.R.’s November 2016 resale housing report include:
With a significant uptick in closed sales, C.AR.’s unsold inventory index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate, declined on both a monthly and annual basis. The index slipped to 3.1 months in November from 3.4 months in October. The index stood at 4.2 months in November 2015.
With the jump in home sales, new statewide active listings continued to decline, falling 11.7 percent from October and 6.2 percent from a year ago.
The median number of days it took to sell a single-family home edged up negligibly from 29.4 days in October to 29.7 days in November but was down from a revised 37.6 days in November 2015.
San Francisco County had the highest price per square foot in November at $804/sq. ft., followed by San Mateo ($783/sq. ft.), and Santa Clara ($602/sq. ft.). Counties with the lowest price per square foot in November included Siskiyou ($124/sq. ft.), Madera ($127/sq. ft.) and Kings ($130/sq. ft.).