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California home sales reach highest level in two years, experience first double-digit increase since May 2012, C.A.R. reports

• Existing, single-family home sales totaled 437,040 in June on a seasonally adjusted annualized rate, up 3.3 percent from May and 11 percent from June 2014.
• Statewide sales were above 400,000 mark for third straight month.
• June statewide median home price was $489,560, up 0.8 percent from May and 7 percent from June 2014.
• California’s median home price was the highest since November 2007.
• Available housing supply remained constrained with 3.3 months of inventory.

LOS ANGELES (July 15) – Sales of existing, single-family homes in June reached the highest level in two years and experienced the first double-digit increase since May 2012, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Home sales in the state have risen year over year for five straight months.

Home sales remained above the 400,000 mark in June for the third consecutive month and rose to highest level since July 2013. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 437,040 units in June, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The June figure increased 3.3 percent from the revised 423,000 level in May and 11 percent compared with home sales in June 2014 of 393,820. The year-to-year change is significantly higher than the previous 6-month average increase of 4.3 percent observed from December 2014-May 2015.

"Home prices continue to improve but at a more moderate rate compared with the previous year," said C.A.R. President Chris Kutzkey. "However, in areas such as the San Francisco Bay Area where tight inventory is fueling stiff competition and generating multiple offers, home prices are still rising at or near double-digit rates, and creating a challenging environment for potential buyers in the region. "

The median price of an existing, single-family detached California home edged up in June from both the previous month and year for the fifth consecutive month. The median home price was up 0.8 percent from $485,830 in May to $489,560 in June, the highest level since November 2007. June’s median price was 7 percent higher than the revised $457,700 recorded in June 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

"The housing market remained solid in June as the economy continued to pick up steam following a lackluster first quarter," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Overall, market fundamentals appear strong, and should provide some support for the market to stay above last year’s level in the upcoming quarter. Housing supply, however, is one variable that remains a concern and could have an adverse effect on the market if the inventory constraints do not improve."

Other key points from C.A.R.’s June 2015 resale housing report include:

• While sales continued to improve from last year at the state level, the number of active listings dipped slightly from the previous year. Statewide, active listings dropped 1.9 percent in June compared with last year, but increased 5.1 percent from May. Regionally, the number of active listings increased 4.4 percent in the Central Valley and dipped 0.8 percent in Southern California, but declined significantly in the Bay Area (-10.7 percent.)
• The June Unsold Inventory Index declined to 3.3 months in June, down from 3.5 months in May and 3.8 months in June 2014. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.
• The median number of days it took to sell a single-family home rose slightly in June to 33.3 days compared with 28.5 days in May but was down from 33.8 days in June 2014.
• According to C.A.R.’s newest housing market indicator which measures the sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices. The statewide measure suggests that homes are selling at a median of 99 percent of the list price, slightly up from 98.7 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 106.3 percent, up from 104 percent a year ago, but down from 107.3 percent in May.
• The average price per square foot** for an existing single-family home was $226 in June 2015, unchanged from the previous month but a 3.7 percent increase from June 2014. Price per square foot at the state level has been on an upward trend since early 2012, and has been rising on a year-over-year basis for 41 consecutive months. In recent months, however, the growth rate in price per square foot has slowed down as home prices level off. San Francisco County had the highest price per square foot in June at $790/sq. ft., followed by San Mateo ($755/sq. ft.), and Santa Clara ($596/sq. ft.). The three counties with the lowest price per square foot in June were Siskiyou ($106/sq. ft.), Madera ($114/sq. ft.), and Kings ($118/sq. ft.).
• Mortgage rates increased in June, with the 30-year, fixed-mortgage interest rate averaging 3.98 percent, up from 3.84 percent in May and 3.16 percent in June 2014, according to Freddie Mac. Adjustable-mortgage interest rates also edged up in June, averaging 2.54 percent, up slightly from 2.49 in May and 2.40 percent in June 2014.

Graphics (click links to open):

• Unsold inventory by price range.
• Change in sales by price range.
• Sales share by price range.
• Sales-to-active listings ratio.
• Sales-to-list ratio.
• Price per square foot.

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. Due to the low sales volume in some areas, median price changes may exhibit unusual fluctuation. 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 33 counties.

Leading the way?® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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June 2015 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

June 2015 County Unsold Inventory and Time on Market
(Regional and condo sales data not seasonally adjusted)

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