California’s spring housing market showed mixed results, as home sales cooled in April and home prices continued to accelerate, especially in the San Francisco Bay Area region, according to the California Association of Realtors (CAR).
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 416,790 units in April, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide.
April’s sales figure was down 1.7% from the 423,990 level in March and up 2.2% compared with home sales in April 2017 of a revised 407,960. March marked the second straight deceleration in home sales and the first decline in three months.
“After nearly three years of decline in active listings, we’re finally seeing an improvement in the availability of homes for sale, which is encouraging for prospective buyers as we enter the busy spring home-buying season,” said CAR President Steve White. “However, entry-level buyers may continue to experience the housing shortage, as homes priced under $300,000 continue to bear the brunt of inventory issues.”
Home prices maintained their strong year-over-year growth across California, with the statewide median price jumping 3.5% in April to reach $584,460, up from a revised $564,830 in March and rising 8.6% from a revised $537,950 in April 2017. With the median price per square foot rising to $281, the growth in home prices marks true increases in home values rather than a shift in the market toward sales of larger or higher-end homes. However, with the Bay Area outperforming the rest of the state, there is undoubtedly some pressure on the median price, as the Bay Area made up a larger share of home sales.
“After increasing year over year by more than 8 percent for the past three months, the California median home price is close to striking distance of the pre-recession peak price of $594,530, which was recorded in May 2007,” says CAR Senior Vice President and Chief Economist Leslie Appleton-Young. “With a continued imbalance of supply and demand, we’ll likely break previous price records – which many areas have already done – before the summer is over.”
Sales of homes priced under $300,000 declined 15% on an annual basis, though the magnitude of the declines has slowed. Conversely, sales of homes priced $1 million and higher continued to grow by double-digits.
Despite median home prices well exceeding $1 million in the Bay Area, sales remained robust in April, as the region’s median price increased 14.1% from a revised $885,000 last April to $1,010,000 in April 2018. Prices in six of nine counties increased double-digits on a year-over-year basis. Additionally, at $969,300, Alameda County is on the cusp of hitting a median home price of $1 million.
By contrast, home prices in Southern California were tepid but still showed a steady, upward trend. Los Angeles and San Bernardino counties posted double-digit increases, while prices throughout the rest of the region grew by mid-single-digits in April. While dipping slightly in April, at $818,000, the median home price in Orange County is close to its pre-recession peak.
After falling below the three-month benchmark in March for the first time since the end of 2017, the statewide unsold inventory index ticked up to 3.2 months in April compared with 2.9 months in March and 3.3 months in April 2017.
The median number of days it took to sell a California single-family home remained low at 15 days in April compared with 17 days in April 2017, according to CAR.
Also, mortgage rates have been on the rise since breaking the 4% barrier in March. The 30-year, fixed-mortgage interest rates averaged 4.47% in April, up from 4.44% in March and from 4.05% in April 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also ticked higher in April to an average of 3.66% from 3.65% in March and from 3.15% in April 2017.
Photo: Leslie Appleton-Young