No, California’s housing market didn’t fall "off a cliff" in July

Mortgage

At first look, it appears California’s housing market in July significantly struggled, with single-family homes and condominiums falling a whopping 10.4% for the month and 12.8% from July 2015, the latest report from PropertyRadar found.

But PropertyRadar dug a little deeper into the data, finding that while home sales did decline, it wasn’t as bad as first expected.

Madeline Schnapp, director of Economic Research for PropertyRadar, explains that it looks like July sales “fell off a cliff.”

“Looking closer at the data, we noted that July 2016 had two fewer business days than July 2015. That calendar quirk was enough depress July sales,” she said. “When the missing days were taken into account, the sales decline was approximately 3% for the month and 5% for the year, in line with expectations.”

Even with the better figures, Schnapp added that sales were tepid this past month. “June sales will likely represent the peak of the 2016 season and are expected to retreat from here on out,” she said.   

The report also found that the July 2016 median price of a California home was $438,000, down 0.7%, from a revised $441,000 in June. On a yearly basis, median home prices were up 5% from $417,000.

The median price of a condominium fell to $417,000, down 0.2% from an adjusted $418,000 in June 2016 but up 4.3% from $400,000 in July 2015.

Schnapp, however, did include a bit of positive news for homeowners.

“The silver lining to rising prices is in the past two years 575,000 California homeowners have escaped their negative equity prisons,” said Schnapp.  “Now armed with positive equity, these homeowners can take advantage of near record low mortgage interest rates to refinance, sell an existing home and buy a new one.”

The number of homeowners in a negative equity position fell to 472,000, or 5.4% of all California homeowners.

The report added that since July 2014, the number of negative equity homeowners has fallen more than 50 percent.

The California Association of Realtors recently reported similar findings for July, posting that year-to-date home sales fell from the previous year for first time in 18 months. 

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