CALIFORNIA, JUNE 16, 2016 – California single-family home and condominium sales were 37,093 in May 2016, an increase of 2.2 percent from a revised 36,287 in April 2016. On a year-ago basis, sales were down 4.7 percent from 38,921 in May 2015.
“Sales continue to be lackluster state-wide,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Without an increase in affordable inventory, high prices continue to depress sales. Unfortunately, our 2016 forecast of anemic sales in the face of high prices and low inventory is shaping up to be right on.
”Year-to-date sales (January through May 2016) totaled nearly 156,000 properties, down 3.8 percent from the same time period in 2015 and nearly unchanged from the same period in 2014. Year-to-date sales in 2014 and 2016 were the lowest since 2008.
The May 2016 median price of a California home was $430,000, unchanged from a revised $430,000 in April. On a year-ago basis, median home prices were up 6.2 percent from $405,000 in May 2015. The median price of a condominium was $405,000, down 2.4 percent from $415,000 in April 2016 but up 1.3 percent from $400,000 a year ago.
“Price appreciation took a breather this past month amidst lackluster sales,” said Schnapp. “How many buyers are there in the Bay Area willing to spend a million dollars on a 1,200 square foot, 2 bedroom, 1 bath home built in 1961? At some point buyers are just going to say, ‘No Thank You".
"Within the 26 largest California counties, the highest year-over-year price appreciation was concentrated in counties of the greater Bay Area: Santa Clara (15.1 percent), Contra Costa (13.1 percent), Monterey (12.4 percent), and Santa Cruz (12.2 percent).
Cash sales of single-family homes and condominiums in May 2016 were 20.7 percent of total sales, up 1.5 percent from April 2016 but down 6.7 percent from May 2015. Single-family residences and condominiums purchased by trusts represented 36.4 percent of total cash sales.
“Despite lower year-over-year sales volumes, cash sales continue to represent one in four transactions,” said Schnapp. “As the yield on the 10-year U.S. Treasury note continues to fall, parking cash in real estate continues to look attractive.”
“We believe one of the reasons cash purchases remain high is due to a phenomena we have named ‘Millennial Phantom Ownership’,” said Schnapp. “It appears there are increasing numbers of parents and grand-parents of Millennials buying houses and condominiums as a place for their children to live while they attend college or start new careers and ‘safely’ park cash.”
Within the 26 largest counties in California, the counties with the highest percentage of cash sales were Monterey (31.0 percent), Fresno (25.9 percent), Marin (25.2 percent), San Francisco (24.2 percent), Riverside (23.9 percent) and Santa Cruz (23.3 percent).
In May 2016, institutional investor purchases by LLCs and LPs rose 16.1 percent from April 2016 to the highest level since October 2013. On a year-ago basis purchases were up 5.1 percent.
“The jump in institutional investor purchases by LLCs and LPs caught our eye this past month,” said Schnapp. “While a one month surge in sales may simply be an anomaly, the lack of attractive alternative investments with real positive returns may be driving interest. Recently, investments in Real Estate Investment Trusts (REITs) have generally outperformed the wider stock market indices.”
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.
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 cancelled, 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.