Closed sales of existing single-family homes slipped again in February, marking the seventh straight month of declining activity. The California Association of Realtors Â® (C.A.R.) stated that sales of existing homes during the month reached a seasonally adjusted yearly 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 house in February 2013.
“The slower sales in February reflects reduced housing affordability after three years of solid price rises 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 considerable amount for many potential home buyers attempting to get into the market.”.
Basically every county reporting to C.A.R. posted year-over-year declines in sales. Increases were indicated in Contra Costa Country (+22 percent) and San Francisco Country (+14.9 percent) and sales in the small counties of Madera and Amador had also increased.
Inventories increased in February with a 4.7 month supply of existing single-family homes available for sale compared with 4.3 months in January and 3.6 months in February 2013. C.A.R.’s Unsold Inventory Index reflects both the few homes on the market and the current sales rate. A six- to seven-month supply is considered common in a normal market.
With declining sales and rising inventories the state-wide median price of an existing, single-family detached home prices pulled back 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 denoting two full years of consecutive year-over-year price increases and the 20th straight month of double-digit annual gains, as higher priced homes comprised a larger share of the market compared to a year ago.
“Supply conditions in the housing market have shown an upturn since the end of last year, besides the lowest price range where the inventory for distressed properties is, has been depleted. In the mid-priced range of $300,000-$750,000, which pays for nearly half of all home sales, inventory is up 27 percent, while the supply of high-end homes – residential properties marked up 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 help trade-up buyers who are anticipated to control the market in 2014, as many of them will be looking for house in these price categories.”.
First time buyer’s are going to have some real problems entering the market. Tighter underwriting guidelines, and a depleted lower end of the price ranges.
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 produced by C.A.R. from a survey of more than 90 Realtor associations all over the state.