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The lowest mortgage rates in 18 months failed to spark the California housing market in October as sales stayed flat and home prices increased at the slowest pace since early 2012, the Arcadia Association of Realtors® said.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 396,220 units in October, according to information collected by the California Association of Realtors® from more than 90 local REALTOR® associations and MLSs statewide. Sales in October were unchanged from a revised 396,400 in September but were down 1.9 percent from a revised 404,000 in October 2013. October marked a full year that sales were below the 400,000 level. The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
“As we move into the off-peak home buying season, prospective buyers who may have delayed their purchase earlier in the year should take advantage of the current favorable market conditions and resume their home search,” said 2014 A.A.R. President Mike Vachani. “With home prices stabilizing and interest rates dropping back down to levels not seen since mid-last year, housing affordability should improve to benefit buyers.”
The median price of an existing, single-family detached California home decreased 2.3 percent from September’s median price of $461,370 to $450,620 in October but was up 5.4 percent from the revised $427,540 recorded in October 2013. The statewide median home price has been higher on a year-over-year basis for more than two years. 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.
“While home sales essentially were unchanged statewide, there were pockets of strong sales growth, especially in coastal regions. The Bay Area, for example, continued to exhibit strong price gains, decent sales growth, and extremely low housing inventory,” said the A.A.R.’s CEO Andrew Cooper. “If current price and rate conditions persist, overall home sales should improve for the rest of the year.”
Other key facts from C.A.R.’s October 2014 resale housing report include:
– Housing inventory slipped in October, with the available supply of existing, single-family detached homes for sale dropping from 4.2 months in September to 3.8 months in October. The index was a revised 3.3 months in October 2013. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.
– The median number of days it took to sell a single-family home edged up in October, up from a revised 40 days in September to 41.9 days in October and from 33.4 days in October 2013.
– According to C.A.R.’s newest housing market indicator measuring sales-to-list price ratio*, multiple bid offers for properties has waned, and properties are again generally selling below the list price. The statewide measure suggests that homes are selling at 97.5 percent of the list price. This is down from a 99.1% ratio at the same time last year. The Bay Area is the only region where homes are selling above list prices and are generally selling about 1.3 percent more than asking price.
– The median price per square foot** for an existing single-family California home was $216 in October 2014, an increase of 0.2 percent from the previous month and a 6.4 percent increase from October 2013. Price per square foot at the state level has been showing an upward trend since early 2012. In fact, it has been rising on a year-over-year basis for 33 consecutive months. San Mateo County had the highest price per square foot in October with $659/sq. ft., followed by Santa Clara ($521/sq. ft.), and Santa Cruz ($399/sq. ft.). The top three counties with the lowest price per square foot in October were Siskiyou ($104/sq. ft.), Glenn ($110/sq. ft.), and Madera ($111/sq. ft.).
– Mortgage rates fell in October, with the 30-year, fixed-mortgage interest rate averaging 4.04 percent, down from 4.16 percent in September and down from 4.19 percent in October 2013, according to Freddie Mac. The October 2014 average 30-year fixed rate was the lowest since May 2013, just before the Federal Reserve announced its intention to taper the bond buying program. Adjustable-mortgage interest rates in October also fell, averaging 2.41 percent, down from 2.43 percent in September and down from 2.63 percent in October 2013.
Representing local Realtors® in the San Gabriel Valley for 90 years, the ARCADIA ASSOCIATION OF REALTORS® (www.TheAAR.com) is one of the oldest trade organizations in CA. The AAR is dedicated to the advancement of professionalism in real estate and is an advocate for private property rights. A.A.R. is headquartered in Arcadia.