Seventh Straight Month of Lower Home Sales in California

Closed sales of existing single-family homes slipped again in February, marking the seventh straight month of declining activity. The California Association of Realtors® (C.A.R.) said that sales of existing homes during the month were at a seasonally adjusted annual rate of 361,210 units.  This was a 0.7 percent dip from the January rate of 363,930 units.  It was the fourth month that existing home sales were under 400,000 and the rate was 13.7 percent below the rate of 418,520 homes in February 2013.

"The slower sales in February reflects diminished housing affordability after three years of solid price increases and interest rates that are nearly a full percentage point higher than a year ago," said C.A.R. President Kevin Brown.  "With the interest rate difference alone, home buyers this year would have to pay $150 more per month on their mortgage payment than last year, a substantial amount for many would-be home buyers trying to get into the market."

Virtually every country reporting to C.A.R. posted year-over-year declines in sales.  Increases were noted in Contra Costa Country (+22 percent) and San Francisco Country (+14.9 percent) and sales in the small counties of Madera and Amador were also up.   

Inventories improved in February with a 4.7 month supply of existing single-family homes available for sale compared to 4.3 months in January and 3.6 months in February 2013.  C.A.R.'s Unsold Inventory Index reflects both the number of homes on the market and the current sales rate. A six- to seven-month supply is considered typical in a normal market.

With declining sales and increasing inventories the statewide median price of an existing, single-family detached home retreated 1.6 percent from January's median price of $410,990 to $404,250.  February's price was 21.3 percent higher than a year earlier marking two full years of consecutive year-over-year price increases and the 20th straight month of double-digit annual gains, as higher priced homes made up a larger share of the market compared to a year ago. 

"Supply conditions in the housing market have shown some improvement since the end of last year, except for the lowest price range where the inventory for distressed properties is depleted.  In the mid-priced range of $300,000-$750,000, which covers nearly half of all home sales, inventory is up 27 percent, while the supply of high-end homes - properties priced at or above $1 million, also is up 13 percent from a year ago," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  "The improvement in these prime price ranges will benefit trade-up buyers who are expected to dominate the market in 2014, as many of them will be searching for homes in these price categories."

The median number of marketing days for a single-family home fell to 40 days from 44.3 days in January but remained higher than the 34.3 days it took to sell a home in February 2013.

Sales and price data are generated by C.A.R. from a survey of more than 90 Realtor associations throughout the state.