California home sales and median price post higher in October

- Existing, single-family home sales totaled 442,970 in October on a seasonally adjusted annualized rate, up 4.1 percent from September and 8 percent from October 2015.

- October’s statewide median home price was $513,520, up 1.2 percent from September and up 7.3 percent from October 2015.

- Statewide sales of condos and townhomes fell 6.6 percent from September and were up 2.9 percent from October a year ago.

LOS ANGELES (Nov. 16) – Bolstered by healthy sales activity in Southern California and the Central Valley, California existing home sales and median price gained ground in October on a month-to-month and year-over-year basis, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
  
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 442,970 units in October, 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 2016 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The October figure was up 4.1 percent from the revised 425,680 level in September and up 8 percent compared with home sales in October 2015 of a revised 410,310. Home sales remained above the 400,000 pace for the seventh straight month, and were up year-over-year for the second consecutive month. The year-over-year increase was the largest since January, and October’s sales level was the highest since July 2013.

“With prices continuing to increase amid a low supply of homes for sale on the market, especially in the San Francisco Bay Area and coastal regions, home buyers are migrating toward lower-priced homes in more affordable inland areas,” said C.A.R. President Geoff McIntosh. “As a result, home prices at the lower end of the market have risen significantly in the past year, challenging an already depressed home ownership rate.”

The statewide median price remained above the $500,000 mark for the seventh straight month, with little signs of slowing down. The median price of an existing, single-family detached California home was up 1.2 percent in October to $513,520 from a revised $507,260 in September. Since 2010, prices typically have declined from September to October. The monthly price gain is an indication that demand remains unseasonably strong.

October’s median price increased 7.3 percent from the revised $478,780 recorded in October 2015. The year-over-year price increase was the largest since January. 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 monthly price decline is primarily due to seasonal factors.

“While this month’s sales and price gains are encouraging, the market continues to experience a supply issue that won’t abate any time soon,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “A shortage of new listings remains a threat to home sales in the short run, and with available inventory below normal levels, the dearth of listings suggests that the market will remain tight over the near term.”

Other key points from C.A.R.’s October 2016 resale housing report include:

• C.A.R.’s Unsold Inventory Index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate slipped to 3.4 months in October from 3.5 months in September. The index stood at 3.6 months in October 2015.

• Statewide active listings continue to decline, falling 6.7 percent from September and 6 percent from a year ago.

• The median number of days it took to sell a single-family home inched up from 28.9 days in September to 29.4 days in October but was down from 34.7 days in October 2015.

• C.A.R.’s sales-to-list price ratio* was 98.4 of listing prices statewide in October, 98.6 percent in September and 98.3 in October 2015.

• The average price per square foot** for an existing, single-family home statewide was $247 in October, $250 in September, and $237 in October 2015.

• San Francisco County had the highest price per square foot in October at $865/sq. ft., followed by San Mateo ($795/sq. ft.), and Marin ($659/sq. ft.). Counties with the lowest price per square foot in October included Siskiyou ($123/sq. ft.), Glenn ($125/sq. ft.), and Tehama ($126/sq. ft.).

• Mortgage rates have already started to increase and are likely to rise higher as the Federal Reserve normalizes monetary policy. Mortgage rates edged slightly higher in October, with the 30-year, fixed-mortgage interest rate averaging 3.47 percent, up from 3.46 percent in September but down from 3.80 percent in October 2015, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates also rose in October to an average of 2.83 percent, up from 2.81 percent in September but down from 2.89 percent in October 2015.

Graphics (click links to open):

• October sales at-a-glance infographic.
• Calif. historical existing home sales.
• Share of sales by price range.
• Calif. historical condo sales.
• Calif. historical median home price.
• Calif. historical unsold inventory index.

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.  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 39 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

October 2016 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

October-16	Median Sold Price of Existing Single-Family Homes							Sales
State/Region/County	Oct-16	Sep-16		Oct-15		MTM% Chg	YTY% Chg	MTM% Chg	YTY% Chg
CA SFH (SAAR)	$513,520	$507,260		$478,780	r	1.2%	7.3%	4.1%	8.0%
CA Condo/Townhomes	$419,800	$414,570		$390,850	r	1.3%	7.4%	-6.6%	2.9%
Los Angeles Metro Area	$464,230	$463,330		$443,540	r	0.2%	4.7%	-3.4%	0.4%
Inland Empire	$314,390	$319,350		$293,090		-1.6%	7.3%	-7.6%	2.6%
S.F. Bay Area	$810,390	$770,150		$732,070	r	5.2%	10.7%	-0.8%	-0.3%
S.F. Bay Area
Alameda	$780,000	$762,250		$710,000	r	2.3%	9.9%	-7.4%	-1.0%
Contra-Costa	$540,000	$552,000		$505,000	r	-2.2%	6.9%	-7.1%	-12.2%
Marin	$1,225,000	$1,165,000		$1,200,000	r	5.2%	2.1%	43.4%	4.1%
Napa	$618,250	$650,000		$655,000	r	-4.9%	-5.6%	-12.4%	49.3%
San Francisco	$1,407,500	$1,218,750		$1,295,000	r	15.5%	8.7%	35.8%	-5.1%
San Mateo	$1,350,000	$1,290,000		$1,188,940		4.7%	13.5%	6.6%	9.3%
Santa Clara	$1,047,500	$1,000,000		$951,000		4.8%	10.1%	0.4%	8.4%
Solano	$392,500	$389,500		$342,500	r	0.8%	14.6%	-1.6%	4.5%
Sonoma	$595,000	$590,000		$529,750	r	0.8%	12.3%	-6.9%	-9.4%
Southern California
Los Angeles	$533,370	$546,920		$509,570	r	-2.5%	4.7%	-0.6%	-3.3%
Orange	$750,000	$739,000		$700,000	r	1.5%	7.1%	-3.0%	8.1%
Riverside	$355,950	$352,250		$330,000	r	1.1%	7.9%	-8.9%	3.7%
San Bernardino	$247,590	$254,330		$231,330		-2.7%	7.0%	-5.3%	1.0%
San Diego	$576,620	$569,000		$520,500	r	1.3%	10.8%	-2.7%	7.1%
Ventura	$631,330	$629,420		$604,610		0.3%	4.4%	2.4%	-6.2%
Central Coast
Monterey	$533,370	$546,920		$486,000		-11.8%	2.9%	-7.3%	-10.3%
San Luis Obispo	$538,500	$574,750		$526,650	r	-6.3%	2.3%	-20.9%	-14.6%
Santa Barbara	$595,000	$732,500		$725,000	r	-18.8%	-17.9%	-7.1%	3.1%
Santa Cruz	$799,900	$774,500		$743,750		3.3%	7.5%	-16.5%	-12.2%
Central Valley
Fresno	$235,000	$240,000		$215,000	r	-2.1%	9.3%	-7.4%	10.5%
Glenn	$185,050	$220,500		$201,500	r	-16.1%	-8.2%	-14.3%	0.0%
Kern	$227,000	$215,000		$210,000		5.6%	8.1%	-14.8%	-13.7%
Kings	$217,000	$197,000		$180,000	r	10.2%	20.6%	-8.8%	0.0%
Madera	$227,500	$240,000		$202,500	r	-5.2%	12.3%	-4.1%	18.6%
Merced	$233,250	$214,000		$195,000	r	9.0%	19.6%	-0.8%	14.0%
Placer	$436,000	$430,240		$397,500	r	1.3%	9.7%	-10.2%	-4.5%
Sacramento	$320,000	$317,500		$290,000	r	0.8%	10.3%	-5.5%	3.9%
San Benito	$506,000	$527,500		$487,500		-4.1%	3.8%	2.2%	-4.1%
San Joaquin	$320,000	$322,000		$280,000	r	-0.6%	14.3%	2.9%	-1.1%
Stanislaus	$280,000	$270,000		$259,000	r	3.7%	8.1%	6.7%	-5.7%
Tulare	$205,000	$209,900		$191,450	r	-2.3%	7.1%	-12.6%	-3.7%
Other Counties in California
Amador	$276,500	$243,500		$267,000	r	13.6%	3.6%	21.7%	60.0%
Butte	$293,000	$275,000		$262,000	r	6.5%	11.8%	12.4%	0.0%
Calaveras	$300,050	$285,000		$246,940	r	5.3%	21.5%	1.0%	-8.9%
Del Norte	$264,500	$239,500		$249,000	r	10.4%	6.2%	90.0%	-29.6%
El Dorado	$419,000	$419,000		$385,000	r	0.0%	8.8%	-2.3%	13.7%
Humboldt	$305,000	$290,000		$255,000	r	5.2%	19.6%	-6.0%	-14.7%
Lake	$262,500	$220,000		$210,000	r	19.3%	25.0%	23.8%	13.0%
Mariposa	$267,250	$332,500		$248,750	r	-19.6%	7.4%	100.0%	40.0%
Mendocino	$360,000	$370,000		$353,500	r	-2.7%	1.8%	-11.3%	-6.0%
Mono	$379,000	$465,000		$599,000		-18.5%	-36.7%	-59.1%	-52.6%
Nevada	$360,000	$348,700		$330,500	r	3.2%	8.9%	-13.3%	-17.2%
Plumas	$215,000	$278,500		$264,760	r	-22.8%	-18.8%	-7.9%	2.9%
Shasta	$249,000	$239,000		$234,500	r	4.2%	6.2%	-1.6%	9.1%
Siskiyou	$182,500	$192,000		$187,000	r	-4.9%	-2.4%	-24.1%	-20.0%
Sutter	$250,500	$247,500		$250,000	r	1.2%	0.2%	18.3%	10.5%
Tehama	$163,000	$219,000		$195,250	r	-25.6%	-16.5%	0.0%	-7.9%
Tuolumne	$221,000	$242,500		$250,000	r	-8.9%	-11.6%	-4.5%	1.6%
Yolo	$381,250	$407,000		$370,000	r	-6.3%	3.0%	-8.3%	-7.0%
Yuba	$236,000	$245,000		$228,500	r	-3.7%	3.3%	-4.8%	19.7%

r = revised

October 2016 County Unsold Inventory and Time on Market
(Regional and condo sales data not seasonally adjusted)

October-16	Unsold Inventory Index					Median Time on Market
State/Region/County	Oct-16	Sep-16		Oct-15		Oct-16	Sep-16		Oct-15
CA SFH (SAAR)	3.4	3.5		3.6	r	29.4	28.9		34.7	r
CA Condo/Townhomes	2.8	2.8		3.0		28.1	27.4	r	31.5	r
Los Angeles Metropolitan Area	3.8	3.7		4.0		43.2	42.1		50.7
Inland Empire	4.3	4.0		4.5		45.6	42.9		52.0
S.F. Bay Area	2.3	2.6		2.2	r	24.3	24.3		23.1	r
S.F. Bay Area
Alameda	2.0	2.1		2.2		20.5	19.8		19.5
Contra-Costa	2.5	2.5		1.3	r	21.1	21.4		21.1	r
Marin	2.6	4.3		1.7		34.0	37.2		33.3	r
Napa	4.5	4.4		7.2	r	61.0	53.1		56.5	r
San Francisco	2.1	3.2		1.9		19.9	25.2		21.2
San Mateo	2.1	2.5	r	2.3	r	20.8	20.6		18.6
Santa Clara	2.0	2.4	r	2.4	r	22.0	21.7		20.6
Solano	2.7	3.0		3.1		43.0	43.0		40.7	r
Sonoma	2.9	3.0		3.2		50.5	46.4		47.8	r
Southern California
Los Angeles	3.5	3.3		3.7		35.6	35.7		45.8	r
Orange	3.6	3.8		3.9		49.1	49.2		56.7
Riverside	4.5	4.1		4.7		47.4	44.0		53.6
San Bernardino	4.0	3.9		4.3		42.2	41.0		49.2
San Diego	3.3	3.4		3.7		24.3	23.6		25.0
Ventura	3.9	4.2		3.7		58.1	56.7		58.8
Central Coast
Monterey	4.9	4.7	r	4.2	r	35.8	27.3		34.7
San Luis Obispo	4.8	4.0		4.1		35.6	31.5		40.3
Santa Barbara	5.1	4.9		4.6	r	29.6	32.5		35.6	r
Santa Cruz	3.8	3.3	r	3.6	r	34.2	26.0		25.9
Central Valley
Fresno	3.8	3.7		5.0		24.9	24.7		29.5
Glenn	5.0	4.3		4.6		31.0	50.3		45.5
Kern	4.1	3.7		4.0		31.5	27.1		26.9	r
Kings	3.4	3.4		3.6		24.1	25.0		24.1
Madera	4.6	4.7		7.5		47.1	45.5		54.9
Merced	3.0	2.9		4.3		33.8	31.5		34.0
Placer	2.9	2.9		3.2		24.2	23.9		27.4
Sacramento	2.4	2.6		2.7		21.9	20.3		23.5
San Benito	3.8	4.2	r	3.1	r	26.2	26.7		25.5
San Joaquin	2.9	3.2		3.1		24.5	21.3		23.9
Stanislaus	3.2	3.5		3.1		23.1	24.0		24.8
Tulare	4.3	3.9		4.5		26.8	27.7		31.0
Other Counties in California
Amador	4.3	5.3		6.7		55.2	52.8		93.1
Butte	2.9	3.7		3.4		29.3	27.1		36.2
Calaveras	5.0	5.4		5.3		58.2	58.2		67.2
Del Norte	8.1	16.1		5.8		128.3	95.8		123.1
El Dorado	3.5	4.0		4.6		41.7	45.9		51.3
Humboldt	3.4	3.6		3.5		33.9	27.5		49.7
Lake	5.4	7.3		6.7		81.9	74.1		76.4
Mariposa	6.0	13.0		11.8		100.7	98.3		91.0
Mendocino	7.1	7.0		7.4	Jan-00	75.5	77.3		74.2	r
Mono	14.0	6.4	r	NA		115.2	123.4		125.0
Nevada	3.9	3.7		3.9		34.8	31.0		47.1
Plumas	9.5	10.7		10.2		124.6	108.4		124.1
Shasta	4.4	4.7		5.6		41.9	41.5		33.9
Siskiyou	6.1	5.0		5.5		51.3	38.7		87.1
Sutter	2.3	3.3		3.0		26.9	24.9		25.0
Tehama	6.7	6.8		6.0		73.7	52.2		55.9
Tuolumne	6.6	6.4		6.7		67.2	46.7		51.1
Yolo	3.0	2.8		2.8		24.6	23.0		24.9
Yuba	2.5	2.7		4.1		25.4	22.1		26.2

r = revised
NA = not available

Real Estate in 2017: What To Expect

2016 was marked by low interest rates and a surge of millennials entering the housing market, so what can real estate professionals expect to see in 2017? MarketWatch recently broke down some major themes that will impact your business in the upcoming year.

2017 Trend Watch

9 Global Trends That May Affect Your Market

3 Online Trends to Watch in 2017

Tech Trends to Embrace in 2017

Word to know: Surban

The suburbs are not dying, in fact John Burns Consulting says almost 80 percent of residential growth to occur in suburban communities over the next 10 years. Suburbs are, however, incorporating urban amenities like pedestrian-friendly shopping areas, general walkability, and entertainment options. This new type of suburbia also has a new name: Surban.

"These developments are more than simply mixed-use," says Danielle Leach, a senior consultant at John Burns Real Estate Consulting in Chicago. "Surban living is becoming a new way of life for many: where the blend of urban and suburban living provides the best of both worlds."

Housing preference to know: the Move-Up

Many millennials are skipping the starter home altogether and are focusing on the "move-up" home. According to Jessica Lautz, managing director for research at NAR, many millennial buyers have put themselves in a good position in terms of savings, and want something more than a condo or a starter home. You'll want to make sure you're pointing your millennial clients in this direction when helping them with their home search.

Demographic to know: Generation Z

Believe it or not, the next generation of buyers, those who make up Generation Z, are already becoming a focus for real estate professionals, since the first wave will turn 18 in 2017. Gen Z grew up in a much different time than the millennial generation, and experts say they overwhelmingly aspire to be homeowners. At a recent panel at the 2016 REALTORS® Conference & Expo in Orlando, a group of Gen Z kids revealed that they want to be reached via technology platforms that were on their level like Snapchat, and not Facebook, which they say is for "old people." They also ranked green features and location as things they find important. Working with a real estate pro is also important to them. In fact,a  whopping 81 percent of Gen Z said they want to work with an agent when buying a home.

Source: "5 big real-estate trends to watch in 2017," MarketWatch (Nov. 15, 2016)

Where Investors Can Find the Best Deals Now

The winter off-peak period can be the best time of the year to acquire single-family rentals, according to a new study released by HomeUnion, an online real estate investment and management firm.

Read more: The Best "Secret" Rental Markets for Investors

The average cap rate for SFRs during the winter months was 6 percent last year compared to 5.3 percent in the summer, the report shows. What’s more, investors pay 7.2 percent less per square foot for the same property during the winter as they do during the spring and summer buying season.

“Based on seasonal cap rate fluctuations, our study conclusively found that early winter is the best time to acquire SFRs,” says Steve Hovland, director of research for HomeUnion. “In many metros, median home prices drop substantially during the colder months, while rent losses were marginal for investors. Winter is the perfect time to acquire solidly performing SFR assets in cold-weather metros such as Pittsburgh and Chicago, as well as int he Sun Belt markets of Jacksonville, Tampa, and Greenville, S.C. These markets all ranked among our top 20 metros.”

HomeUnion ranked the following markets as best bets for seasonal bargains for investors:

1. Pittsburgh: $69,000 (2016 winter median SFR) vs. $87,000 (summer median SFR)
2. San Francisco: $920,000 vs. $1.2 million
3. Milwaukee: $70,000 vs. $92,000
4. Philadelphia: $127,000 vs. $161,300
5. Chicago: $128,000 vs. $225,000
6. Columbus: $110,000 vs. $149,800
7. Boston: $247,000 vs. $300,000
8. Cincinnati: $74,900 vs. $115,000
9. Cleveland: $62,000 vs. $80,100
10. Greenville, S.C.: $86,250 vs. $140,000

Source: HomeUnion

Mortgage applications tank 9% as post-election rates soar

A sharp spike in interest rates following the election of Donald J. Trump last week threw icy cold water on the mortgage market.

Total mortgage application volume fell 9.2 percent on a seasonally adjusted basis from the previous week, according to the Mortgage Bankers Association. Applications, however, were 12 percent higher than one year ago.

Daniel Acker | Bloomberg | Getty Images

A 'For Sale' sign stands in a vacant lot near new homes in Dunlap, Illinois.

The drop was expected, given how quickly mortgage interest rates rose. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.95 percent, from 3.77 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio loans.

"Following the election, mortgage rates saw their biggest week-over-week increase since the taper tantrum in June 2013, and reached their highest level since January of this year," said David Stevens, president and CEO of the Mortgage Bankers Association. "Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity." 

Rate-sensitive refinances fell another 11 percent last week from the previous week, seasonally adjusted, to the lowest level since March. Refinance volume is still 19 percent higher than the same week one year ago, when rates were slightly higher.

"It is no surprise that refinance volume has fallen, as the long boom has meant that there are fewer borrowers with any incentive to refi," said Stevens. "We continue to expect strong growth in home sales and purchase volume over the next few years, given our expectations of a strong job market and favorable demographics. The decline this week likely just reflects potential buyers waiting to see whether rates will stay at these higher levels." 

Mortgage applications to purchase a home fell 6 percent for the week and are now at the lowest level since January. Purchase volume is just 3 percent higher than one year ago. This may have less to do with interest rates and more to do with homebuyers pulling back before the election, uncertain of their economic futures.

Higher rates are not what the housing market needs right now, as tight inventory of homes for sale has lit a hot fire under home prices. If, however, the economy gets a boost and wages grow under the Trump administration, higher interest rates may not matter so much.

"When rates have gone up 100 bps while the economy has grown, the impact on sales has been far less than most people think, and virtually no impact on price," John Burns of California-based John Burns Real Estate Consulting said in a note. "The bottom line is that the economy matters most. Rising rates cause people to buy a smaller home or commute a bit further, but more people are buying in a growing economy. If we have a recession, that is a much different story."

Diana Olick | @DianaOlick  http://www.cnbc.com/2016/11/16/mortgage-applications-tank-as-post-election-rates-soar.html

Wednesday, 16 Nov 2016 | 7:00 AM ETCNBC.com

Uncertainty Over the Election Moves Rates Up

Average fixed-rate mortgages edged higher this week, but forecasters are unsure if the rising rates may be a temporary blip or a more lasting one.

"This week's survey reflects pre-election market conditions,” says Sean Becketti, Freddie Mac’s chief economist. “As a result, the 30-year mortgage rate increased to 3.57 percent, only 3 basis points higher than last week's level. On Wednesday, the 10-year Treasury yield closed above 2 percent, about 25 basis points higher than its pre-election value and its highest yield since January. At this point, it is too soon to tell whether Treasuries will hold this new level or if the mortgage rate will increase as much over the coming week."

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 10:

• 30-year fixed-rate mortgages: averaged 3.57 percent, with an average 0.5 point, rising from last week’s 3.54 percent average. A year ago, 30-year rates averaged 3.98 percent.
• 15-year fixed-rate mortgages: averaged 2.88 percent, with an average 0.5 point, rising from last week’s 2.84 percent average. A year ago, 15-year rates averaged 3.20 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.88 percent, with an average 0.4 point, increasing from a 2.87 percent average the prior week. Last year at this time, 5-year ARMs averaged 3.03 percent.

Source: Freddie Mac