California Sales Stuck in Doldrums,
Down 13.1 Percent from July
Median Price Falls 1.2 Percent to $415,000
CALIFORNIA, SEPTEMBER 22, 2015 – California single-family home and condominium sales fell 13.1 percent to 36,733 in August from 42,261 in July but were up 3.1 percent from 35,613 in August 2014. Driving the increase in year-over-year sales was the 6.4 percent increase in non-distressed property sales.
“While we had a couple of strong months this year, August sales are a clear reminder that CA sales are still quite weak ,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Year-to-date sales volumes are lower than 4 of the last 6 years, only slightly better than 2007, and far below pre-crisis volumes.”
The median price of a California home in August was $415,000, down 1.2 percent from a revised $420,000 in July.
“ The lack of price appreciation in August was welcome news for buyers ,” said Schnapp. “Median prices peaked at $420,000 in July, its highest level since November 2007. Without higher sales volumes it is unlikely prices will push higher particularly since we are heading into the fall and winter selling season.”
On a year-over-year basis, the median price of a California home was up 4.5 percent from $397,000 dollars in August 2014 down from the double digit annual price appreciation that characterized the market in 2013 through mid-2014. Despite the slowdown in price appreciation, at the county level, year-over-year median price increases exceeded 10 percent in six of California’s 26 largest counties and two of those experienced double-digit price increases in excess of 20 percent. The counties with the largest annual price increases were San Bernardino (+11.2 percent), San Francisco (+28.3 percent), San Mateo (+21.3 percent), Santa Clara (+11.8 percent) and Solano (+11.7 percent).
Cash sales fell 8.1 percent in August to 7,730 and represented 21.0 percent of total sales up 1.1 percent from 19.9 percent of total sales in July. Cash sales as a percentage of total sales remain elevated but have been steadily declining since reaching a peak of 40.0 percent of total sales in August 2011. On a regional basis, of the 26 largest California counties, cash sales as a percentage of total sales were highest in Merced (26.7 percent), Santa Barbara (25.5 percent), San Francisco (25.1 percent), and Monterey (25.1 percent) counties.
“Cash sales increased as a percent of total sales in August,” said Schnapp. “We are looking forward to see what impact the stock market volatility in the past two months will have on housing, but given escrow timing, we don’t believe it had any impact in August.”
In other California housing news:
- Flip sales fell 6.5 percent during the month of August but are up 1.0 percent over the past 12 months. Despite the decline in August, since reaching a seasonal low in January 2015, flip sales have increased 55.2 percent.
- The number of homeowners in a negative equity position continued downward in August. Approximately 6.7 percent of homeowners, or nearly 600,000, owed more than their home was worth , down 0.4 percent for the month and 42.3 percent from August 2014. To put the current negative equity level in perspective, in January 2015 there were just under one million California homeowners underwater, or one in nine. Today, one in 15 California homeowners are underwater.
- Institutional Investor (LLC and LP entities) purchases fell 5.2 percent to 1,295 during the month of August and are down 4.0 percent from August 2014. Since reaching a peak in December 2012, institutional investor demand has declined 44.0 percent. Trustee Sale purchases by LLC and LPs were down 83.5 percent from their October 2012 peak but have trended mostly sideways since May 2014. Institutional Investor sales 8.9 percent for the month and is down 17.7 percent from August 2014. Investor sales have been on a downward trend since March 2015.
- Foreclosure Notices of Default fell 8.7 percent in August from July while Notices of Trustee Sale and Foreclosure Sales increased 0.2 percent and 0.4 percent, respectively. Despite the increases, foreclosure notices and sales are near their lowest levels in our records dating back to 2007 . Foreclosure inventories fell 1.1 percent for the month and are down 9.2 percent from August 2014.