California Home Price Closes Year on High Note as Sales Moderate in December

Housing market posts solid performance in 2017, C.A.R. reports

– Existing, single-family home sales totaled 420,960 in December on a seasonally adjusted annualized rate, down 4.4 percent from November and up 1.4 percent from December 2016.

– December’s statewide median home price was $549,560, up 0.5 percent from November and up 7.6 percent from December 2016.

– Housing inventory hit the lowest level observed in 13 years, with the unsold inventory index falling to 2.5 months in December.

Los Angeles, CA – Jan. 22, 2018 (PRNewswire-USNewswire) Amid the lowest housing inventory levels in more than 13 years, existing home sales still eked out a year-over-year gain, while the median sales price posted a solid annual increase, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

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Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 420,960 units in December, 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 December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The December sales figure was down 4.4 percent from the 440,340 level in November and up 1.4 percent compared with home sales in December 2016 of a revised 415,280.

For 2017 as a whole, a preliminary 423,760 homes closed escrow in California, up 1.4 percent from 2016’s pace of 417,720. After a strong first quarter start to 2017, sales momentum lost steam throughout the remainder of the year, and year-to-date sales growth declined steadily to hit the lowest level at the end of the year.

“A severe shortage of homes for sale continues to push up home prices and erode affordability, which in turn is subduing home sales,” said C.A.R. President Steve White. “What’s more, with the passage of the tax reform bill that makes homebuying less attractive, homeownership costs will increase for many, which could reduce the desire and demand for buying a home.”

The statewide median price continued to grow at a strong pace over last year and remained above the $500,000 mark for the tenth straight month. The $549,560 December median price was 0.5 percent higher than November’s $546,820 and 7.6 percent higher than the revised $510,560 recorded in December 2016. The year-over-year price gain has been growing at or above 7 percent for six of the past seven months.

“California’s housing market turned in a respectable performance throughout 2017, with home sales increasing 1.4 percent and the median price climbing 6.9 percent for the year as a whole to reach $537,860 in 2017,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “Looking ahead, the market will remain solid but both sales and prices will be impacted by inventory shortages, impending interest rate hikes, and general economic factors including the effects of tax reform.”

Other key points from C.A.R.’s December 2017 resale housing report include:

  • All of the major regions posted year-over-year sales declines, with sales in the Los Angeles metro region dropping 7.1 percent, the Inland Empire decreasing 3.5 percent, and sales in the San Francisco Bay Area dipping 0.3 percent from last year.
  • Sales dropped in five of six counties in the Southern California region, with both Ventura and Orange County decreasing by double digits. A supply shortage and affordability were likely factors in the decline. Sales in Los Angeles, San Diego, and Riverside also dropped moderately when compared to last year, while sales in San Bernardino remained virtually unchanged.
  • Home prices across the state continued to grow in general in December. Forty-five of the 51 reported counties recorded a year-over-year price increase, with 19 of them growing at double-digit rates.
  • With housing inventory at the tightest level among all regions across the state, the Bay Area region continued to appreciate the most with a 14.1 percent growth rate from the previous year. Seven of the nine Bay Area counties recorded a year-over-year increase in median price of at least 10 percent. Santa Clara prices surged the most at 34.7 percent.
  • Statewide active listings continued to decline in December, dropping 12 percent from a year ago. Since the beginning of the year, active listings have declined by more than 10 percent every month, and the number of available listings for sale has trended downward for more than two years.
  • The available supply of homes hit the lowest level observed since June 2004, with the statewide unsold inventory index dropping to 2.5 months in December from 2.9 months in November. 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 2.6 months in December 2016.
  • The median number of days it took to sell a single-family home remained low at 25 days in December, compared with 32 days in December 2016.
  • C.A.R.’s sales price-to-list price ratio* was 98.7 percent statewide in December, 98.9 percent in November, and 98.1 percent in December 2016.
  • The average statewide price per square foot** for an existing, single-family home statewide was $265 in December, up from $246 in December 2016.
  • Mortgage rates edged higher in December as 30-year, fixed-mortgage interest rates averaged 3.95 percent in December, up from 3.92 percent in November and from 4.2 percent in December 2016, according to Freddie Mac. The five-year, adjustable mortgage interest rate also ticked higher in December to an average of 3.39 percent from 3.24 percent in November and from 3.23 percent in December 2016.

Graphics (click links to open):

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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Cary Grant’s Former Villa Paradiso Estate in Palm Springs, California

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California Housing Package Launched January 1 with a Resolution to Ease Housing Costs, Shortage

Billions in funding, expediting development key to success

Sacramnto, CA – January 3rd, 2018 (BUSINESS WIRE) California’s far-reaching housing package went into effect January 1, 2018, launching a major breakthrough for funding and fast-tracking housing development, especially for lower-income residents in the state.

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California lawmakers approved the 15-bill housing package September 15, and Governor Edmund G. Brown signed the legislation two weeks later, building the foundation to help with the state’s fast-rising housing costs and easing local regulations that create financial hurdles and lengthy delays hurting low-income and middle-class families.

The California Department of Housing and Community Development is hosting a dedicated page of the department’s website, www.hcd.ca.gov as a one-stop-shop for the housing package, including summaries for all 15 bills and downloadable materials; frequently asked questions and implementation plans will be added soon.

“The housing package brings funding for more housing for low-income residents, requires that cities and counties follow their affordable housing plans, and removes roadblocks for much-needed projects,” said Ben Metcalf, Director of the California Department of Housing and Community Development. “The package will not solve the housing cost and the housing shortage challenges overnight, but provides a very solid foundation that we can build on in the years ahead.”

SB 2 is expected to generate an estimated $250 million a year to finance the construction of affordable housing and SB 3 places a bond measure on the November 2018 statewide ballot. If passed, the bond would provide $3 billion to finance affordable housing for low-income residents and another $1 billion for home and farm purchases for veterans.

Other bills streamline the approval process, fund planning and technical assistance to cities and counties, provide financial incentives for expediting certain housing developments, and provide one-time funding for homelessness programs.

“California’s housing challenges demand that everyone works together on solving the problem,” said HCD’s Metcalf.

Only 28% of the state’s households could afford to buy the median-priced home during the third quarter, the lowest percentage in a decade, according to a recent report from the California Association of Realtors.

The financial challenges are just as difficult for households that rent. More than 3 million households—the equivalent of the combined populations of San Diego, San Jose and San Francisco—pay at least 30% of their income on rent. And more than 1.6 million low-income households spend more than 50% of their income on rent.

The housing package will have a far-reaching effect beyond just affordable housing and expediting development. Infill, mixed-use and transit-oriented developments are part of the plan, allowing more low-income residents to live closer to work, which will ease congestion on roadways, improve air quality, and reduce health issues for many Californians.

About California Department of Housing and Community Development

The California Department of Housing and Community Development is dedicated to the preservation and expansion of safe and affordable housing so more Californians can have a place to call home. Our team works to ensure an adequate supply of housing for Californians and promotes the growth of strong communities through its leadership, policy, and program development. For more information, please visit www.hcd.ca.gov and sign up for HCD’s listserv announcements, follow us on Twitter, @California_HCD and Facebook.

Contacts

California Department of Housing and Community Development
Evan Gerberding
(916) 263-7408
evan.gerberding@hcd.ca.gov

California Homeowners and Consumers to be Hit Hard by Tax Reform Bill, C.A.R. Says

Los Angeles, CA – Dec. 20, 2017 (PRNewswire-USNewswire) The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) issued the following statement in response to the passage of the Tax Cuts and Jobs Act tax reform bill by Congress today:

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“While the impact of this bill may not be as harmful in many parts of the country, here in California where the typical home costs two and a half times the national home price, homeowners and would-be buyers will be hit especially hard. As we move forward and learn the true and full impact of this legislation, we hope we can work with Congress to make the necessary changes that will keep housing as the foundation of this great nation’s economy.”

“We are disappointed that Congress has passed tax reform legislation that puts home values at risk and dramatically undercuts the incentive to own a home,” said C.A.R. President Steve White.

“For more than a century, American tax policy has recognized the value of homeownership to American middle-class wealth creation, strong and stable communities, and as a driver of our economy. Homeownership has been and will always be the foundation of opportunity for Americans across our great nation, and C.A.R. will not stop advocating for it,” said White.

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.

Wildfires Threaten SoCal Housing Markets Already Struggling with Unaffordability and Low Inventory, According to Redfin

  • National home prices rose 7.8 percent in November as inventory declined 12.8 percent
  • Pace and competition in housing market continued to accelerate in November after 26 months of inventory declines
  • Sonoma County housing market felt impact of October wildfires as inventory plunged 47 percent
  • In Ventura and Santa Barbara counties where wildfires are threatening homes, inventory has declined by double-digits for three months straight and fires could worsen the inventory shortage
  • San Jose prices climbed 23 percent and competition reached new heights in November

Seattle, WA – December 14, 2017 (BUSINESS WIRE) (NASDAQ: RDFN) — Home price growth was strong in November, up 7.8 percent from last year, according to Redfin (www.redfin.com), the next-generation real estate brokerage. The median sale price was $292,000 across the markets Redfin serves. Sales were down 1.3 percent. The number of homes for sale declined 12.8 percent compared to a year ago, marking 26 months in a row of inventory declines.

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“Overall, 2017 has been an uneven year for home sales. The year started out strong, but a combination of low inventory and weather events overtook sales growth; sales have been flat to declining in six out of the past 11 months,” said Redfin chief economist Nela Richardson. “The good news is markets have been quick to recover from severe weather events, even as challenges remain. For example, Houston home sales were up 4.3 percent in November from a year ago, and Tampa sales were up 6.1 percent. We are hopeful that Southern California markets show the same level of resilience in the aftermath of wildfires there.”

The number of homes newly listed for sale in November increased a modest 1.1 percent. Any increase in new listings is welcome news for buyers, however, the number of homes put on the market in November wasn’t enough to put a dent in the long-standing inventory shortage. There were 3.1 months of supply in November, far below the six months of supply that represent a market balanced between buyers and sellers. Nationally, the typical home spent 46 days on the market, four days fewer than last November.

2017 has been the fastest market on record and if current trends continue, Redfin predicts 2018 will be even faster.

Wildfires Threaten California Communities Already Facing Inventory Shortages

In parts of Los Angeles, Ventura and Santa Barbara counties, hundreds of homes have been destroyed by wildfires and hundreds more are under threat from fires that remain uncontained. While it is too early to know how many families and homes will be impacted, we do know these counties are already facing a shortage of homes for sale. Families who are displaced by the wildfires will find it challenging to find another home for sale nearby.

In Ventura County in November, inventory was down 17.6 percent and prices grew 9.8 percent year over year to a median of $600,000. In Santa Barbara County, inventory was down 23.3 percent and prices grew 6.8 percent year over year to a median of $575,000. The fires will cause further stress in an already tight housing market.

“The fires have had a big impact on the people and communities in and around Ventura, Ojai and Santa Barbara,” said Redfin agent John Venti. “Our already low inventory levels are likely to take a beating in the coming months not only from the loss of homes but also the disruption of life and business in the area. A few prospective home sellers have texted me as they were being evacuated to cancel our listing consultation appointments. But these fires, devastating as they are, are temporary. I’m optimistic that people will resume their holiday festivities and business as usual as soon as the fires are extinguished and the air clears.”

The impact of the October wildfires in Northern California was seen in November market data. In Santa Rosa, one of the hardest hit cities, inventory fell 46.6 percent in November from a year prior, a 27.8 percent drop from October. Across Sonoma County, inventory declined 31.2 percent year over year and prices rose 15.2 percent to a median of $633,000. The typical home in Sonoma County sold for 101.6 percent of the asking price, the highest sale-to-list price ratio since 2013. This spike in competition is unusual for the November market and likely related to the fires.

Home sales were up 8 percent year over year in Santa Rosa and 6.4 percent in Sonoma County in November. December sales in the affected areas may decline as a result of the fire activity.

Other November Highlights

Competition

  • The most competitive market in November was San Jose, CA where 75.9% of homes sold above list price, followed by 73.1% in San Francisco, CA, 66.0% in Oakland, CA, 43.5% in Seattle, WA, and 42.0% in Tacoma, WA.
  • The average sale-to-list price ratio in San Jose was 107.9 percent, the highest on record in that market since Redfin began tracking this data in 2009.
  • San Jose, CA and Seattle, WA were the fastest markets at 12 median days on market, followed by Oakland, CA (14), Boston, MA (15) and San Francisco, CA (17).

Prices

  • San Jose, CA had the nation’s highest price growth, rising 23% since last year to $1,076,000. San Francisco, CA had the second highest growth at 18.5% year-over-year price growth, followed by Cleveland, OH (15.9%), Seattle, WA (15.4%), and Salt Lake City, UT (13%).
  • Honolulu, HI was the only metro with a price decline in November falling 3.2%.

Sales

  • 4 out of 73 metros saw sales surge by double digits from last year. Richmond, VA led the nation in year-over-year sales growth, up 14.6%, followed by Honolulu, HI, up 14.2%. Philadelphia, PA rounded out the top three with sales up 10.8% from a year ago.
  • Allentown, PA saw the largest decline in sales since last year, falling 13.3%. Home sales in Grand Rapids, MI and Rochester, NY declined by 13.1% and 11.0%, respectively.

Inventory

  • San Jose, CA had the largest decrease in overall inventory, falling 50.2% since last November. Atlanta, GA (-32.1%), Buffalo, NY (-30.4%), and Oakland, CA (-29.1%) also saw far fewer homes available on the market than a year ago.
  • Salt Lake City, UT had the highest increase in the number of homes for sale, up 40.3% year over year, followed by Baton Rouge, LA (10.9%) and Austin, TX (9.1%).

To read the full report, complete with data and charts, please visit the following link: https://www.redfin.com/blog/2017/12/market-tracker-november-2017.html

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.

Contacts
Redfin Journalist Services:

Alina Ptaszynski
(206) 588-6863
press@redfin.com