Home sales decrease but prices are rising
June sales decline blamed on tax credit expirations
Home sales decreased 4.2 percent in June in California compared with the same period a year ago, while the median price of an existing home rose 13.6 percent, the California Association of Realtors reported this week.
"Buyers who scrambled to close escrow in May to take advantage of federal and state tax credits before they expired impacted the number of homes sold last month," said CAR President Steve Goddard. "Although we expect sales to be lower in the second half of the year because of the absence of the government stimulus, they should remain above the long-run average and be significantly higher than the trough in 2007, when sales bottomed out.
"Although the tax credits are no longer available, it's important to keep in mind that home prices are substantially below their peaks and interest rates remain at historic lows, making this a very affordable time for many first-time buyers to purchase a home of their own," he said.
Closed escrow sales of existing, single-family detached homes in California totaled 492,800 in June at a seasonally adjusted annualized rate, according to information collected by CAR from more than 90 local Realtor associations statewide. Statewide home resale activity decreased 4.2 percent from the revised 514,230 sales pace recorded in June 2009. Sales in June 2010 decreased 11.1 percent compared with the previous month.
The statewide sales figure represents what the total number of homes sold during 2010 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during June 2010 was $311,950, a 13.6 percent increase from the revised $274,640 median for June 2009, CAR reported. The June 2010 median price decreased 3.8 percent compared with May's $324,430 median price.
"As we anticipated, home prices have continued to post modest gains, due in large part to the lean inventory of homes for sale in many regions of the state," said CAR Vice President and Chief Economist Leslie Appleton-Young. "This has contributed to market stability and bodes well for the remainder of the year.
"We're also seeing an increase in home sales at the higher-end of the market, a reflection of the slight thaw in jumbo financing, although there still is a long way to go before jumbo loans are readily available to qualified buyers," she said.
Highlights of C.A.R.'s resale housing figures for June 2010:
* CAR's Unsold Inventory Index for existing, single-family detached homes in June 2010 rose to 4.8 months, compared with 4.2 months in June 2009. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
* Thirty-year fixed-mortgage interest rates averaged 4.74 percent during June 2010, compared with 5.42 percent in June 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged 3.86 percent in June 2010, compared with 4.93 percent in June 2009.
* The median number of days it took to sell a single-family home was 43.3 days in June 2010, compared with 44.3 days (revised) for the same period a year ago.
In a separate report covering more localized statistics generated by CAR and DataQuick Information Systems, 232 of the 372 cities and communities reporting showed an increase in their respective median home prices from a year ago.
Statewide, the 10 cities with the highest median home prices in California during June 2010 were: Manhattan Beach, $1,737,500; Los Altos, $1,618,500; Saratoga, $1,425,000; Palo Alto, $1,308,500; Laguna Beach, $1,230,500; Newport Beach, $1,150,000; Los Gatos, $1,045,000; Rancho Palos Verdes, $1,000,000; Cupertino, $980,000; and Lafayette, $946,250.
Statewide, the cities with the greatest median home price increases in June 2010 compared with the same period a year ago were: National City, 59 percent; Newport Beach, 52 percent; Richmond, 52 percent; San Bernardino, 47 percent; San Pablo, 38 percent; Fairfield, 37 percent; Walnut, 34 percent; Colton, 32 percent; Imperial Beach, 31 percent; and Poway, 30 percent.