California Home Sales Begin Upward Rise

California home sales bounced back in February after hitting the lowest sales level in more than 10 years the previous month. According to the California Association of Realtors, February’s annual sales level was the highest in six months, and the monthly growth in sales was the highest since January 2011.

According to information collected by C.A.R. from more than 90 local Realtor associations and MLSs statewide, sales of existing, single-family detached homes in California totaled 399,080 units in February, up 11.3 percent from the revised 358,470 level in January and down 5.6 percent from home sales in February 2018 of 422,910. February’s decline was the smallest since July 2018.

“Lower interest rates and stabilizing home prices motivated would-be buyers to get off the fence in February,” said Jared Martin, C.A.R. president. “With mortgage rates reaching their lowest point in a year, housing affordability improved as buyers’ monthly mortgage payments became more manageable. Instead of the double-digit growth rates that we observed a few months ago, monthly mortgage payments increased by 2.7 percent, the smallest increase in the last 12 months.”

The statewide median home price dipped 0.6 percent to $534,140 in February from a revised $537,120 in January. The median was up 2.2 percent from $522,440 in February 2018.

In the San Francisco Bay Area, home sales in six of the nine Bay Area counties fell from a year ago, while Alameda, Marin and San Francisco counties recorded annual sales gains. Santa Clara County home sales were down 10.6 percent from February 2018, but up 12.7 percent from January 2019.

Home prices in Marin, San Francisco, San Mateo and Santa Clara counties remained above $1 million, but all of the counties recorded annual price declines. The February 2019 median price for a single-family home in Santa Clara County was $1,170,000, down 1.3 percent from the January median of $1,185,000 and down 15.4 percent from the median of $1,383,500 in February 2018.

All major regions recorded an increase in active listings, with the Bay Area posting the highest increase at 41.9 percent. Active listings increased in three of nine Bay Area counties by 50 percent or more, with Santa Clara County leading the way at 62.9 percent, followed by San Mateo (59.7 percent) and Alameda (50 percent).  Santa Clara County’s Unsold Inventory Index was 3.1 months in February, compared with 3 months in January and just two months in February of 2018.

“Indicators point to a promising spring home buying season for both buyers and sellers. Buyers have this great window of opportunity with more homes on the market, lower interest rates and home prices stabilizing,” said Alan Barbic, president of the Silicon Valley Association of Realtors. “Sellers will benefit from this historically busy time in the market with renewed buyer interest after last year’s waning activity.”

The 30-year, fixed-mortgage interest rate averaged 4.37 percent in February, up from 4.33 percent in February 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate also increased in February to an average of 3.87 percent from 3.60 in February 2018.