California’s housing market continued to improve in August as home sales climbed to their highest level in more than a decade as the median home price broke last month’s record and hit another high, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 465,400 units in August, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2020 if sales maintained the August pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
August’s sales total climbed above the 400,000 level for the second straight month since the COVID-19 crisis depressed the housing market earlier this year, marking the first time since the summer of 2016 that sales increased from the previous month three months in a row. August sales rose 6.3 percent from 437,890 in July and were up 14.6 percent from a year ago, when 406,100 homes were sold on an annualized basis.
“California’s strong housing recovery in terms of sales and price over the past few months is encouraging as motivated buyers are eager to purchase homes amid the lowest interest rates ever, which led to the fastest sales growth in a decade,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “However, persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which will outweigh the benefits of record low interest rates and hamper housing affordability.”
With home sales continuing to bounce back in August and sales of higher-priced properties recovering faster than the rest of the market, the statewide median price hit another new high after setting records in June and July. California’s median home price broke the $700,000 mark for the first time, reaching $706,900 in August, a 6.1 percent jump from July’s $666,320 and 14.5 percent from $617,410 in August 2019. The yearly price increase was the highest recorded since March 2014 and larger than the six-month average of 4.3 percent observed between February 2020 to July 2020.
“Low rates and tight housing inventory are contributing factors to the statewide median price setting a new record high three months in a row from June to August, said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “A change in the mix of sales is another variable that keeps pushing median prices higher, as sales growth of higher-priced properties continued to outpace their more affordable counterparts.”
Reflecting the rise in home prices, consumers continue to say it is a good time to sell, according to C.A.R.’s monthly Consumer Housing Sentiment Index. Conducted in early September, the poll found that 58 percent of consumers said it is a good time to sell, up from 54 percent a month ago, and up from 46 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 34 percent of the consumers who responded to the poll believed that now is a good time to buy a home, sharply higher than last year, when 22 percent said it was a good time to buy a home.
Other key points from C.A.R.’s August 2020 resale housing report include:
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 50 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 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.