California Realtors Say Tight Inventories Constraining Home Sales, Prices are Increasing

News

For the last few months the National
Association of Realtors® (NAR) has been making some general statements that tight
inventories of existing homes
are “in some locations” impacting home
sales.  Today the California Association
of Realtors® (C.A.R.) confirmed that they are one of those locations.

C.A.R. said that “A continued shortage
of available homes for sale lowered California home Sales in September, while
the median price reached the highest level in more than four years.”  Closed escrow sales of existing single-family
residences (SFR) were at a seasonally adjusted annual rate of 484,240 units,
down 5.2 percent from sales in August and 1.2 percent lower than in September
2011. 

The tight inventory of unsold homes
eased slightly in September, edging up to a 3.7 month supply from 3.2 months in
August but down from 5.3 months in September 0211.  A six to seven-month supply of homes is
considered normal.  At the same time
homes are selling much more quickly.  The
median number of days it took to sell a single-family home in September was
39.3 days compared to 41.1 days in August and 54.2 days one year earlier. 

“For the state, at 3.7 months of
supply, unsold inventory is still less than half what it would be in a normal
market,” said C.A.R. Vice President and Chief Economist Leslie
Appleton-Young.  “As a result of the constrained supply at the moderate
and lower end of the market, sales of homes priced under $200,000 dropped
nearly 28 percent
, and homes priced $200,000-$300,000 fell more than 15 percent
in September.  By contrast, in the upper price range, where inventory
isn’t as much of an issue, sales of homes priced $400,000-$500,000 rose more
than 14 percent, and those priced above $500,000 increased more than 15
percent.”

Good news for many California
homeowners, hundreds of thousands of whom have been underwater on their
mortgages, prices are increasing.  The
statewide median price of an existing SFR was $345,000 in September compared to
$343,820 in August.  The September number
was 19.5 percent above the median price of $288,700 in September 2011.  This was the seventh consecutive month that
median prices increased both year-over-year and month-over month and was the
highest since August 2008 when the median price was $352,730

The median price for a
condo/townhome in September was $264,880 compared to $258,700 in August and
$221,440 in September 2011.  These are
increases of 2.4 percent and 19.6 percent respectively.

These are, however median figures
for the state and there was tremendous variability by region.   C.A.R. President LeFrancis Arnold said, “Sales
in the inland and coastal markets continue to move in different
directions.  Low inventory – especially in distressed areas – is dampening
sales activity. In many of these areas, there is a one- to two-month supply of
REO homes on the market.

The Inland Empire and the Central
Valley have experienced double-digit sales declines compared with last
year.  Meanwhile, sales were higher in San Diego and most Bay Area
counties, where the economies appear to be growing faster than the rest of the
state.” 

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