Continued record low mortgage interest rates sustained California’s housing market in October as home sales and prices took a breather from September’s record high levels and still recorded double-digit increases from a year ago, 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 484,510 units in October, 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 October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
October’s sales total climbed above the 400,000 level for the fourth straight month since the COVID-19 crisis depressed the housing market earlier this year and was just 15,000 units shy of the 500,000 benchmark. October sales dipped 1.0 percent from 489,590 in September and were up 19.9 percent from a year ago, when 404,240 homes were sold on an annualized basis.
“California’s housing market continues to exceed expectations as this year’s traditional homebuying season has shifted into late summer and fall instead of spring and early summer,” said 2021 C.A.R. President Dave Walsh, vice president and manager of the Compass San Jose office. “The market is unseasonably strong, as motivated buyers continue to take advantage of the lowest interest rates in history. The ongoing momentum will keep home sales elevated for the next couple of months, and the housing market will remain a rare bright spot in a struggling economy.”
After setting new record highs for four straight months, California’s home median price dipped on a month-to-month basis for the first time in five months. The statewide median price stayed essentially flat in October, slipping 0.2 percent to $711,300 from September’s record high of $712,430. The year-over-year growth rate, however, continued to increase by double-digits for the third consecutive month and was the second highest gain since February 2014. It was also higher than the six-month average of 6.8 percent observed between April 2020 and September 2020.
“An extremely favorable lending environment and a renewed attitude towards homeownership is prolonging the homebuying season and extending the market’s V-shaped recovery to the off season,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The question that remains to be answered, however, is whether the strong market is sustainable in the longer term as market fundamentals continue to be tested by tight supply, eroding housing affordability, and most of all, the rising number of Coronavirus cases.”
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 November, the poll found that 59 percent of consumers said it is a good time to sell, up from 56 percent a month ago, and up from 47 percent a year ago. Meanwhile, low interest rates continue to fuel the optimism for homebuying; 31 percent of the consumers who responded to the poll believed that now is a good time to buy a home, up from last year, when 24 percent said it was a good time to buy a home.
Other key points from C.A.R.’s October 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.