The number of homes sold in the state of California
continue to remain relatively low due to lack of available housing inventory
and a decline in affordability, a new report from PropertyRadar showed.
According to PropertyRadar’s report, seasonal forces
pushed California single-family home and condominium sales down 4.3% to 35,629
for the month of September, from a revised total of 37,227 in August.
On a year-over-year basis, sales were up 5.8% from
33,674 in September 2014.
According to PropertyRadar’s report, the yearly
increase was driven by a 9.4% increase in non-distressed property sales.
In the first three quarters of 2015, sales are up 7.1%
compared to the same period in 2014. Despite the increase, sales remain far
below 2002 through 2007, PropertyRadar’s report showed.
“When you take a step back and look at sales volumes
over a longer period of time, they remain weak,” said Madeline Schnapp,
Director of Economic Research for PropertyRadar. “Lack of inventory and
declining affordability are holding sales back.”
According to PropertyRadar’s report, the median price
of a California home in September was $405,000, which was down 2.4% from a
revised $415,000 in August. It was also down 2.6% from the 2015 high of
$416,000 in July.
On a year-over-year basis, the median price of a
California home was up 3.3% from $392,000 in September 2014.
Prices may be up on a yearly basis, but Schnapp said
that price appreciation in many parts of the state has slowed or stopped
entirely.
In fact, on a monthly basis, prices were lower in 21
of California’s 26 largest counties, Schnapp said.
According to PropertyRadar’s report, the counties with
the largest price declines were Contra Costa (-5%), Kern (-5.2%) and San Mateo
(-3.3%).
San Francisco prices fell 11.8% for the month but the
decline is likely an artifact of the mix of homes sold rather than an actual
price decline, PropertyRadar’s report showed.
On an annual basis, prices are still appreciating, but
in general at a much slower pace.
Home prices in a few northern California counties,
mostly concentrated in the Bay Area, continue to appreciate rapidly. Counties
experiencing the highest annual price appreciation were Santa Cruz (+18.1%),
Merced (+15%), Santa Clara (+13.8%) and San Mateo (+11.3%).
“Homes in the Silicon Valley corridor, consisting of
San Francisco, San Mateo and Santa Clara counties, continue to buck statewide
trends and are experiencing double-digit price appreciation,” Schnapp said.
“The increased demand from plentiful well-paying jobs, sky high rents, and fear
of higher mortgage interest rates have propelled home prices into the stratosphere.”
Schnapp said that in September, more than half of all
homes sold in San Francisco and San Mateo counties exceeded $1 million.
“I am frequently asked how long can this continue?”
Schnapp said of the San Francisco price explosion. “My answer is, ‘Until you
run out of eager buyers and bankers willing to lend,’ and we clearly are not
there yet.”
PropertyRadar’s report also showed that cash sales
fell 7% in September to 7,243 and represented 20.3% of total sales, down 0.6%
from 20.9% of total sales in August.
Cash sales as a percentage of total sales remain
elevated but have been steadily declining since reaching a peak of 45.1% of
total sales in August 2011.
"Cash does not seem to be in short supply in the
Silicon Valley corridor," said Schnapp. "So far in 2015, 21.5% of
sales were for cash and 61% of buyers put down at least 20% of the purchase
price. At median prices bouncing off of a million dollars, that is an
impressive statistic."
