June 20, 2017
California housing market bounces back in May as sales and median home price perk higher
- Existing, single-family home sales totaled 430,060 in May on a seasonally adjusted annualized rate, up 5.4 percent from April and 2.6 percent from May 2016.
- May's statewide median home price was $550,200, up 2.3 percent from April and up 5.8 percent from May 2016.
- At the regional level, the San Francisco Bay Area, Inland Empire, and Los Angeles metro area all registered year-to-year sales increases of 4.9 percent, 9 percent, and 6.9 percent, respectively.
LOS ANGELES (June 20) – California's housing market rebounded in May as existing home sales and median home price recorded strong gains on both a monthly and annual basis, a trend in every major region of the state, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 14th consecutive month and totaled a seasonally adjusted annualized rate of 430,060 units in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The May figure was up 5.4 percent from the revised 408,030 level in April and up 2.6 percent compared with home sales in May 2016 of a revised 419,000.
"Mortgage rates dropping to the lowest level since November could have been a motivating factor for the sales increase in May," said C.A.R. President Geoff McIntosh. "The low interest rate environment, however, may not last long as the Federal Reserve's gradual rate hike and plan to reduce its balance sheet will likely lead to higher rates, and could change the momentum of the market."
The statewide median price stayed above the $500,000 mark for the third straight month and reached the highest level since August 2007. The median price was up 2.3 percent from a revised $537,920 in April to reach $550,200 in May, and was 5.8 percent higher than the revised $519,930 recorded in May 2016. 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.
"Despite a solid performance thus far in the spring housing market, the continued mismatch between buyers and available homes for sale that's driving up home prices remains an issue," said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. "Stubbornly low supply levels will continue to propel prices higher and, when combined with imminently higher interest rates, will worsen an already dismal affordability issue in the housing market."
Other key points from C.A.R.'s May 2017 resale housing report include:
• The May sales increase was wide reaching as every major region in the state posted an increase over the previous year. The Inland Empire experienced the largest sales gain with a 9 percent increase in existing home sales from last May, followed by an increase of 6.9 percent in the Los Angeles Metro Area, and a 4.9 percent rise in the San Francisco Bay Area.
• New statewide active listings declined for the 23rd month in May, falling 12.4 percent from a year ago.
• The increase in sales, coupled with the double-digit decline in active listings, worsened May's housing inventory outlook. C.A.R.'s Unsold Inventory Index fell from 3.3 months in April to 2.9 months in May. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 3.4 months in May 2016.
• At the county level, 42 of 51 reported counties experienced a drop in the unsold inventory index compared to a year ago. Alameda, San Mateo, and Santa Clara counties had the lowest inventory (1.7 months), followed by San Francisco County (1.9 months) and Sacramento (2.0 months), all in either the Bay Area or a neighboring county to the region, where supply constraints remain a serious issue.
• The median number of days it took to sell a single-family home nudged down from 24.2 days in April to 22.4 days in May and was down from 27.4 days in May 2016.
• C.A.R.'s sales-to-list price ratio* was 100 percent of listing prices statewide in May, 100 percent in April, and 99.7 percent in May 2016.
• The average price per square foot** for an existing, single-family home statewide was $267 in May, $259 in April, and $251 in May 2016.
• San Francisco County had the highest price per square foot in May at $918/sq. ft., followed by San Mateo ($875/sq. ft.), and Marin ($696/sq. ft.). Counties with the lowest price per square foot in May included Lassen ($122/sq. ft.), and Siskiyou and Del Norte ($127/sq. ft.).
• Mortgage rates continued to dip lower since early this year. The 30-year, fixed-mortgage interest rate averaged 4.01 percent in May, down from 4.05 percent in April but up from 3.6 percent in May 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates dipped in May to an average of 3.12 percent from 3.15 percent in April but was up from 2.81 percent in May 2016.
Graphics (click links to open):
• May sales at-a-glance infographic.
• Calif. historical existing home sales.
• Calif. historical median home price.
• Share of sales by price range.
• Calif. price per square foot.
• Calif. sales to list price ratio.
Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.
*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 39 counties.
Leading the way?® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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May 2017 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)
|May-17||Median Sold Price of Existing Single-Family Homes||Sales|
|State/Region/County||May-17||Apr-17||May-16||Price MTM% Chg||Price YTY% Chg||Sales MTM% Chg||Sales YTY% Chg|
|CA SFH (SAAR)||$550,200||$537,920||r||$519,930||r||2.3%||5.8%||5.4%||2.6%|
|Los Angeles Metro Area||$488,720||$482,420||r||$469,090||r||1.3%||4.2%||21.4%||6.9%|
|S.F. Bay Area||$899,730||$895,490||$848,580||0.5%||6.0%||21.8%||4.9%|
|S.F. Bay Area|
|San Luis Obispo||$569,000||$572,500||$540,000||r||-0.6%||5.4%||22.0%||11.7%|
|Other Counties in California|
r = revised
NA = not available
May 2017 County Unsold Inventory and Time on Market
(Regional and condo sales data not seasonally adjusted)
|May-17||Unsold Inventory Index||Median Time on Market|
|CA SFH (SAAR)||2.9||3.3||3.4||22.4||24.2||27.4||r|
|Los Angeles Metro Area||3.2||3.7||3.8||24.5||29.0||r||45.0||r|
|S.F. Bay Area||2.1||2.4||2.5||20.0||20.1||20.2||r|
|S.F. Bay Area|
|San Luis Obispo||3.6||4.0||4.4||23.7||26.4||25.9|
|Other Counties in California|
r = revised
NA = not available
C.A.R. opposes SB 231 (Hertzberg), a bill that would bypass voter approval requirement for property-related fee and tax increases. SB 231 would redefine the word "sewer" for the purposes of Proposition 218 (aka the "Right to Vote on Taxes Act"), which was approved by California voters in 1996. This will allow local governments to tax property owners directly for costs related to stormwater infrastructure projects without the legally required voter approval.
Prop. 218, The Right to Vote on Taxes Initiative, requires all new property-related taxes, assessments, and most fees to be approved by the voters. There is a limited exception for charges for garbage, water, and sewer services. SB 231 would greatly expand the definition of "sewer" to include storm drainage, effectively eliminating the Prop. 218 voter approval requirement for stormwater management projects.
C.A.R. opposes SB 231 because it would allow for local governments to impose new taxes without voter approval in violation of voter-approve Proposition 218. Notwithstanding the merits of a particular project, Proposition 218 gave the decision-making authority for funding to the voters and the voters should be the ones to decide.
Please ask your Assembly Member to Vote No on SB 231. Don't allow local governments to impose sewer taxes by side-stepping voters.
June 28, 2017
California pending home sales stumble for fifth straight month in May
LOS ANGELES (June 28) – Even with a strong performance in May closed escrow sales, California pending home sales fell for the fifth consecutive month, suggesting the state's housing market may underperform over the next few months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Along with the decline in pending sales, REALTORS® are more cautious due to their growing concern over supply and affordability issues, C.A.R.'s May Market Pulse Survey** found. REALTORS® also saw fewer floor calls, and less open house traffic than in April.
Pending home sales data:
• Based on signed contracts, year-over-year statewide pending home sales fell for the fifth straight month in May on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 3.9 percent from 123.0 in May 2016 to 118.1 in May 2017. On a monthly basis, California pending home sales increased 3.9 percent from the April index of 113.7.
• Despite a bounce back in May closed escrow sales, the downward trend in pending sales suggests the housing market may underperform over the next few months. With interest rates expected to rise in the second half of the year, the sales momentum could slow further or even shift in the third and fourth quarters.
• The Southern California Region reversed a three-month decline and posted a 1.3 percent improvement in pending sales from the previous year, aided largely by healthy gains in Orange and Riverside counties, which marked increases of 12.5 percent and 8.4 percent, respectively. Pending sales in San Diego, San Bernardino, and Los Angeles counties declined from last May, but those counties had drops of less than 5 percent.
• The Central Valley also posted a slight gain in May, increasing 2.1 percent. With many counties in the region falling behind last year, pending sales in the region as a whole would have declined year over year if not for solid sales in Fresno, which increased a robust 28.6 percent from last May. Kern County saw pending sales slip by 2.9 percent from May 2016.
• On the flip side of the coin, the San Francisco Bay Area experienced a decline in pending sales in May, falling 5.5 percent on an annual basis. Pending sales in San Francisco County declined the most at 10.8 percent, and San Mateo and Santa Clara counties posted pending sales decreases of 0.7 percent and 2.4 percent, respectively as inventories remained extremely low and median prices exceeded $1 million.
• In C.A.R.'s newest market indicator of future price appreciation, Market Velocity – home sales relative to the number of new listings coming on line each month to replenish that sold inventory – continued its upward momentum in May, suggesting that home prices should grow further in the upcoming months. Solid demand motivated by low interest rates, coupled with tight supply, put upward pressure on prices in the last few months as the home buying season remained competitive. The statewide median price should remain near its recent high until late summer or early fall. Market Velocity is strongly correlated with increases/decreases in price growth with a roughly three- to six-month lag time.
Year-to-Year Change in Pending Sales by County/Region
|County/Region/State||May-17||May-16||Yearly % Change|
|SF Bay Area||168.1||177.9||-5.5%|
* Seasonally adjusted
May REALTOR® Market Pulse Survey**:
Market conditions remained positive, but REALTOR® expectations are beginning to decline. While fewer properties sold above asking price, the market remained competitive as multiple offers inched up from last month and from last year.
• The share of homes selling above asking price was down from 38 percent a year ago to 35 percent in May, while the share of properties selling below asking price was unchanged at 34 percent. The remaining 31 percent sold at asking price, up from 27 percent in May 2016.
• For homes that sold above asking price, the premium paid over asking price rose from 9 percent in May 2016 to 11 percent in May 2017.
• The 34 percent of homes that sold below asking price sold for an average of 18 percent below asking price in May, compared to 10 percent a year ago.
• Seventy percent of properties sold in May received multiple offers, up from 68 percent in May 2016.
• The share of properties receiving three or more offers in May was 44 percent, compared to 46 percent a year ago.
• Homes priced $400,000-$499,000 and $750,000-$999,000 posted the greatest gains in receiving three or more offers compared with last year, rising from 41 percent to 59 percent, and from 50 percent to 60 percent, respectively.
• Listing price reductions fell from 23 percent in May 2016 to 16 percent in May.
• A lack of available inventory continued to be at the top of the list of concerns for REALTORS®, with 41 percent indicating it as their biggest concern. Declining housing affordability/high interest rates concerned 23 percent of REALTORS®, while inflated home prices/housing bubble was cited by 21 percent of REALTORS®. A slowdown in economic growth, lending and financing, and policy and regulations rounded out REALTORS®' remaining biggest concerns.
• REALTORS®' expectations of market conditions over the next year remained positive at an index of 58, up from an index of 54 a year ago.
Graphics (click links to open):
• YTY change in pending home sales by region.
• Pending sales vs. closed escrow sales.
• Fewer properties selling over asking price.
• Multiple offers increase.
• Price range of homes receiving 3+ offers.
• Market Velocity – indicator of future price appreciation.
*Note: C.A.R.'s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.
**C.A.R.'s Market Pulse Survey is a monthly online survey sent to more than 10,000 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month. More than 400 REALTORS® responded.
Leading the way...® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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REALTORS® have selected Bob Goldberg to succeed current NAR CEO Dale Stinton, who is retiring at the end of 2017 after 36 years at NAR and 12 as CEO. Goldberg currently serves as NAR senior vice president of Sales & Marketing, Business Development & Strategic Investments, Professional Development and Conventions.
NAR's leadership team chose Goldberg after an extensive national search. He has been with NAR since 1995 and will be NAR's 12th CEO since the association was founded in 1908.
"Bob's vision, business acumen, and unique ability to successfully leverage NAR's technology investments will ensure REALTORS® remain at the center of the real estate transaction," said 2017 NAR President William E. Brown, a REALTOR® from Alamo, California. "With extensive knowledge of the association and real estate industry, Bob brings with him a strong track record for future-based thinking and enacting change, which is why the NAR leadership team is extremely confident in his ability to lead the association and membership to continued future success."
In his current SVP role, Goldberg is responsible for brand and strategic marketing and association non-dues revenue, and oversees the largest employee base at NAR, with 69 division personnel. He guides a broad range of association initiatives including business development, strategic planning and partnerships, association product and marketing services and management, member professional development, competitive brand positioning, marketing, advertising and promotions, and group conventions.