Home Sales Steady, Prices Fall Slightly

After steep increase in August, September home prices ease up, according to C.A.R. report

California home sales remained firm in September, as home price gains eased back from an unusually high increase in August, the California Association of Realtors (C.A.R.) recently reported.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 396,440 units in September, according to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide.
Sales in September inched up 0.4 percent from a revised 394,700 in August and were down 4.2 percent from 413,850 in September 2013. September marked the 11th straight month that sales were below the 400,000 level and the 14th straight month that sales have declined on a year-over-year basis. The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

“All the current market indicators point to a more balanced real estate market,” said C.A.R. President Kevin Brown. “With market competition cooling down, buyers’ and sellers’ expectations are more in line with each other. The sales price-to-list price ratio is moving toward a more normal level of nearly 98 percent, as compared to 100 percent a year ago, when the market saw a frenzy of multiple offers. The drop in the ratio implies that sellers are pricing more realistically.”

The median price of an existing, single-family detached California home fell 4 percent from August’s median price of $480,280 to $460,940 in September but was up 7.6 percent from the revised $428,290 recorded in September 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.

“September’s slight sales increase and tempering in home price gains suggest optimism as we head into the slower homebuying season,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Home prices are stabilizing, and the year-to-year sales decline is at the lowest level we’ve seen in the last 12 months. The cooling price growth and recent drops in mortgage rates will ease housing affordability and help to improve sales in the final months of the year.”

Other key facts from C.A.R.’s September 2014 resale housing report include:
• Housing inventory inched up higher in September, with the available supply of existing, single-family detached homes for sale increasing from 4 months in August to 4.2 months in September. The index was 3.6 months in September 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 rose in September, up from a revised 38.5 days in August to 39.2 days in September and from a revised 29.8 days in September 2013.
• Mortgage rates rose slightly in September, with the 30-year, fixed-mortgage interest rate averaging 4.16 percent, up from 4.12 percent in August but down from 4.49 percent in September 2013, according to Freddie Mac. Adjustable-mortgage interest rates in September were also up, averaging 2.43 percent, up from 2.37 percent in August but down from 2.67 percent in September 2013.
The California Association of Realtors is one of the largest state trade organizations in the United States with 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. Log onto www.car.org to learn more.