CALIFORNIA, SEPTEMBER 27, 2016 – California single-family home and condominium sales were 39,091 in August, a gain of 4.4 percent for the month but nearly unchanged from 39,062 in August 2015.
Taking a longer-term view, year-to-date sales (January through August 2016) totaled 282,260 properties, down 3.4 percent from the same period in 2015.
“In the same way that July sales were artificially depressed by fewer business days than the prior year, August sales were artificially goosed higher with more business days,” said Madeline Schnapp Director of Economic Research for PropertyRadar. “The best way to make sense of these calendar quirks is to step back and take a year-to-date view. When we do, we see slightly lower sales and higher prices, in perfect alignment with our theme since October 2015 - “Flat is the New Black.”
Regionally, year-to-date sales have been soft throughout California; down 10.4 percent year-over-year in the six San Francisco Bay Area counties, down 3.4 percent in the Sacramento-Central Valley region and down 1.3 percent in Southern California.
The median price of a California home fell 0.9 percent in August to $435,000 from $439,000 in July but gained 4.8 percent from $415,000 a year ago. The median price of a condominium was $416,000, down 1.0 percent from an adjusted $420,000 in July 2016 but up 3.5 percent from $402,000 in August 2015.
At the regional level, prices fell 2.2 percent year-over-year in the San Francisco Bay Area, but gained 7.7 percent in the Sacramento-Central Valley region and 5.7 percent in Southern California.
In 18 of California’s largest 26 counties, median prices were up in excess of five percent year-over-year. The largest median price gains were in the following counties: Santa Barbara (+18.2 percent), Marin (+15.2 percent), Sonoma (+12.5 percent), Merced (+12.2 percent), and Sacramento (+11.2 percent). Prices fell year-over-year in only three California counties this past month: Kern (-4.8 percent), San Francisco (-2.0 percent), and Contra Costa (-1.1 percent).
“What caught our eye this past month was the 10.4 percent year-to-date decline in sales within the six counties surrounding San Francisco Bay in concert with the 2.2 percent decline in median prices,” said Schnapp. “The softness in both sales and prices suggest that prices may have hit their upper limit. When a 2-bedroom, 1-bath, thousand square foot home, built in 1941, on small lot on a busy street is selling for $1.3 million, is anyone surprised?”
Year-to-date through August, cash sales were down 7.8 percent. Cash sales were 19.8 percent of total sales this past month, up 1.2 percent from 18.6 percent but nearly unchanged from 19.2 percent in June 2016.
“Cash sales are considerably lower this year due to prices that are now unattractive to investors,” said Schnapp. “Despite the pull-back, cash sales remain nearly 20 percent of sales, much higher than historic norms, and remain an important part of the real estate market.”
At the county level, cash sales were the highest in San Luis Obispo (+28.0 percent), Sonoma (+27.3 percent), Monterey (+27.5 percent), San Francisco (+24.8 percent) and Placer (24.5 percent) counties.
“From this list of counties, the less populous suburban areas appear to be the beneficiaries of cash-rich buyers,” said Schnapp. “We suspect some of these buyers are recent retirees leaving dense urban areas with their one-time $500,000 tax-free capital gain windfall and relocating. In addition, boomer parents are purchasing homes and condos to ‘rent’ to their cash-strapped millennial children and grandchildren in what we have termed, ‘Phantom Millennial Home Ownership.’ ”
“Peering into our crystal ball, our “Flat is the New Black” market characterization of flat sales and higher prices, remains intact for the foreseeable future,” said Schnapp. “That said, we have our eyes on the San Francisco Bay Area, recent volatility in short-term interest rates and of course the presidential election.”
In other California housing news:
Home Sales - Single-family residence and condominium sales by month from 2007 to current divided into distressed and non-distressed sales. Distressed sales are the sum of short sales, where the home is sold for less than the amount owed, and REO sales, where banks resell homes that they took ownership of after foreclosure. All other sales are considered non-distressed.
Year-over-Year Home Sales Year-over-Year Home Sales - Single-family residences and condominiums sold during the same month for the current year and prior years divided into distressed and non-distressed sales.
Year-to-Date Home Sales – The sum of year-to-date sales of single-family residences and condominiums for the current year and prior years divided into distressed and non-distressed sales.
Median Sales Price vs. Sales Volume - Median sales price (left axis) of a California single family home versus sales volume (right axis), by month from 2012 to current. Median sales prices are divided into three categories: All single-family homes (black line), distressed properties (red line), and non-distressed properties (blue line). Monthly sales volumes (right axis) are illustrated as gray and lavender bars. The gray bars are distressed sales and the lavender bars are non-distressed sales.
California Home Owner Equity - A model estimate of California homeowners segregated into various categories of levels of homeowner equity for a given month. Homeowner numbers represent a percentage of total California homeowners.
Cash Sales - The blue bars (right axis) illustrate cash sales of single-family residences and condominiums by month. The red line (left axis) illustrates cash sales as a percentage of total sales by month.
Flipping – The number of single-family residences and condominiums resold within six months.
Market Purchases by LLCs and LPs - The blue bars (right axis) illustrate market purchases of single-family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates LLC and LP purchases as a percentage of total sales by month.
Market Sales by LLCs and LPs - The blue bars (right axis) illustrate market sales by LLCs and LPs of single-family residences and condominiums by month. The red line graph (left axis) illustrates sales as a percentage of total sales by month.
Trustee Sale Purchases by LLCs and LPs - The blue bars (right axis) illustrate trustee sale purchases (foreclosure sales) of single-family residences and condominiums by LLCs and LPs from 2007 to current. The red line graph (left axis) illustrates purchases as a percentage of total trustee sales by month.
Foreclosure Notices and Sales - Properties that have received foreclosure notices — Notice of Default (green) or Notice of Trustee Sale (blue) — or have been sold at a foreclosure auction (red) by month.
Foreclosure Inventory - Preforeclosure inventory estimates the number of properties that have had a Notice of Default filed against them but have not been Scheduled for Sale, by month. Scheduled for Sale inventory represents properties that have had a Notice of Trustee Sale filed but have not yet been sold or had the sale canceled, by month. Bank-Owned (REO) inventory means properties sold Back to the Bank at the trustee sale and the bank has not resold to another party, by month.
California real estate data presented by PropertyRadar, including analysis, charts, and graphs, is based upon public county records and daily trustee sale (foreclosure auction) results. Items are reported as of the date the event occurred or was recorded with the California County. If a county has not reported complete data by the publication date, we may estimate the missing data, though only if the missing data is believed to be 10 percent or less.