Amid the lowest housing inventory levels in more than 13 years, existing home sales still eked out a year-over-year gain, while the median sales price posted a solid annual increase, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said late Monday.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 420,960 units in December, 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 2017 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The December sales figure was down 4.4% from November and up 1.4% compared with December 2016.
For 2017 as a whole, a preliminary 423,760 homes closed escrow in California, up 1.4% from 2016’s pace of 417,720. After a strong first quarter start to 2017, sales momentum lost steam throughout the remainder of the year, and year-to-date sales growth declined steadily to hit the lowest level at the end of the year.
“A severe shortage of homes for sale continues to push up home prices and erode affordability, which in turn is subduing home sales,” said C.A.R. President Steve White. “What’s more, with the passage of the tax reform bill that makes home buying less attractive, home ownership costs will increase for many, which could reduce the desire and demand for buying a home.”
The statewide median price continued to grow at a strong pace over last year and remained above the $500,000 mark for the tenth straight month. The $549,560 December median price was 0.5% higher than November and 7.6% higher than December 2016. The year-over-year price gain has been growing at or above 7% for six of the past seven months.
“California’s housing market turned in a respectable performance throughout 2017, with home sales increasing 1.4% and the median price climbing 6.9% for the year as a whole to reach $537,860 in 2017,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “Looking ahead, the market will remain solid but both sales and prices will be impacted by inventory shortages, impending interest rate hikes, and general economic factors including the effects of tax reform.”
All of the major regions posted year-over-year sales declines, with sales in the Los Angeles metro region dropping 7.1%, the Inland Empire decreasing 3.5%, and sales in the San Francisco Bay Area dipping 0.3% from last year.
Sales dropped in five of six counties in the Southern California region, with both Ventura and Orange County decreasing by double digits. A supply shortage and affordability were likely factors in the decline. Sales in Los Angeles, San Diego, and Riverside also dropped moderately when compared to last year, while sales in San Bernardino remained virtually unchanged.
With housing inventory at the tightest level among all regions across the state, the Bay Area region continued to appreciate the most with a 14.1% growth rate from the previous year. Seven of the nine Bay Area counties recorded a year-over-year increase in median price of at least 10%. Santa Clara prices surged the most at 34.7%.
Statewide active listings continued to decline in December, dropping 12% from a year ago. Since the beginning of the year, active listings have declined by more than 10% every month, and the number of available listings for sale has trended downward for more than two years.
The available supply of homes hit the lowest level observed since June 2004, with the statewide unsold inventory index dropping to 2.5 months in December from 2.9 months in November. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 2.6 months in December 2016.
