Momentum for the California housing market is continuing, according to a recent housing market report from the California Association of REALTORS® (C.A.R.). The statewide trade group said seasonally adjusted, existing home sales rose both month-to-month and year-over-year in March, plus the statewide median price accelerated to an eight-month high.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 423,990 units in March, said C.A.R. March’s sales figure was up 0.3 percent from the 422,910 level in February 2018 and up 1.6 percent compared with home sales in March 2017 to a revised 417,380. The year-to-year increase was slightly stronger than the six-month average sales growth of -0.1 percent recorded between September 2017 and February 2018.
Home prices maintained strong growth across California, with the statewide median price jumping 8.1 percent to reach $564,830 in March, up from a revised $522,440 in February and rising 8.9 percent from a revised $518,600 in March 2017. The March 2018 California median home price was the highest since August 2017, and the year-over-year gain was the largest since January 2016. In San Diego, by C.A.R.’s accounts, the median selling price of an existing single-family home was $625,400 in March 2018, up from $571,000 in March 2017 and $605,000 in February 2018.
The marked price increase, said C.A.R., was partly due to a shift in sales to high cost regions and robust price growth within the high cost areas, such as San Francisco, Marin San Mateo, and Santa Clara counties. The year-over-year price gain has been growing at or above 7 percent for nine of the past 10 months.
The median number of days for single-family home remaining unsold on the market in California remained low at 16 days in March, compared with 23 days in March 2017 and 22 days in February 2018. In San Diego County, according to C.A.R., homes sold much faster: 12 days in March 2018, 13 days in March 2017 and 13 days in February 2018.
Mortgage rates, meanwhile, have been on the rise since breaking the 4.0 percent barrier in February. Rising mortgage rates makes the cost to borrow money to buy a home more expensive. The 30-year, fixed-mortgage interest rates averaged 4.44 percent in March, up from 4.20 percent in March 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also edged higher in March to an average of 3.65 percent from 3.21 percent last March.
C.A.R. President Steve said, “Sales in the Southern California region have cooled for the past five months, even in the more affordable Riverside and San Bernardino areas.”
C.A.R. Leslie Appleton-Young, senior VP and chief economist, said. “While the decline in the number of active listings has slowed dramatically since the beginning of the year, inventory still remains tight, which is driving home prices higher. Housing demand remains strong and competition is fierce, especially in San Francisco, San Mateo, and Santa Clara, where home prices are being pushed to record levels, and buyers are paying as much as 17 percent over asking price in some markets.”
C.A.R.’s data is based on information collected from more than 90 local REALTOR® associations and multiple listing services statewide.
In other real estate industry news, recent news reports have featured a number of interesting statistics.
— Home prices in San Diego rose 1.1 percent in February and were 7.6 percent higher than a year ago, according to the widely followed the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index (the report specified no dollar figure.). Across the country, prices were 0.4 percent higher in February and up 6.3 percent for the year. The index’s 20-city composite posted a 6.8 percent year-over-year gain in February while the 10-city composite rose 6.5 percent. Seattle had the biggest increase in a year at 12.7 percent.
Other California cities covered by the 20-city index outpaced San Diego. San Francisco was up 10.1 percent in a year and Los Angeles up 8.3 percent. All cities covered in the index experienced gains, which experts attribute to a strong economy and limited home supply. “With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue,” said David M. Blitzer, managing director at S&P Dow Jones Indices.
— The San Diego County median home price soared to its highest point ever, $550,000 in March, said real estate tracker CoreLogic. Home prices increased 6.8 percent in a year, which experts attribute to a lack of homes for sale and a strong economy. The previous home peak was $545,000 in June. The San Diego region is still a cheaper option compared to Los Angeles and Orange counties, which also hit new price peaks in March.
— Zillow’s senior economist Aaron Terrazas said a promising sign for the real estate market’s long-term health is a recent increase in home construction in many areas. “New home inventory has now been above the 300,000 threshold for two straight months, the first time in almost a decade,” he said. “In a market starving for inventory of all kinds, builders are finally putting the old adage of ‘if you build it, they will come’ to the test.”
— Consumer confidence is near an 18-year high. Americans are satisfied about the U.S. economy, job prospects and their own finances under the Trump administration. The Conference Board said consumer confidence climbed to 128.7 in April from 127 in March, suggesting the U.S. economy remains on sound footing despite worries about trade tensions. Americans are more optimistic about their own finances and they think jobs are easy to find, the survey showed. Millions of Americans have found jobs, the unemployment rate is at a 17-year low and businesses are investing more. “Overall, confidence levels remain strong and suggest that the economy will continue expanding at a solid pace in the months ahead,” said Lynn Franco, director of economic indicators.