California single-family home and condominium sales fell 22.0 percent in November to 27,105, down from a revised 34,760 in October. On a year-ago basis, sales were down 3.1 percent from 27,961 in November 2014.
“ November 2015 sales marked the lowest November sales volume since 2007 ,” said Schnapp, Director of Economic Research for PropertyRadar. “It appears the new TILA-RESPA Integrated Disclosure (TRID) rules that went into effect October, 3, 2014 are artificially depressing sales due to the delay in closing.”
The November median price of a California home was $415,000 up 2.5 percent from $404,750 in October. Prices are just shy of the July 2015 peak of $416,000, which was an 8-year high.
“It was a surprise to see median prices jump in November considering the low sales volume,” says Schnapp. “ TRID is likely delaying the closing of lower priced homes which artificially changes the mix of homes sold thus pushing median prices higher .”
Median prices increased in 21 of California’s 26 largest counties. Counties with the largest price increases were Santa Barbara (+21.1 percent), Contra Costa (+8.2 percent), Monterey (+6.3 percent) and Marin (+4.8 percent).
On an annual basis, the median price was up 6.4 percent from $390,000 in November 2014. Annual price gains were five percent or more in 18 of California’s 26 largest counties. The counties with the largest annual price increases were San Francisco (+12.5 percent), Contra Costa (+11.7 percent), Merced (+11.4 percent) and Marin (+11.3 percent).
“ The TRID effect will likely impact the real estate market for another month or so ,” said Schnapp. “In the meantime, artificially depressed sales and higher median prices may be with us through January 2016.”
Cash sales increased 12.2 percent in November to 8,372 up from 7,348 in October. On a year ago basis, cash sales were up 33.4 percent from 6,233 in November 2014. “ Cash sales were off-the-hook in November ,” said Schnapp, Director of Economic Research for PropertyRadar. “A bump in cash sales at year’s end is normal, but a jump of 34.3 percent from 2014 was quite a surprise.”
Cash sales were 30.9 percent of total sales up from an average of 20.7 percent over the past six months. Of the 26 largest counties in California, the counties with the highest percentage of cash sales were San Luis Obispo (+40.1 percent), Marin (+39.0 percent), Riverside (+38.5 percent), Kern (+37.9 percent), Monterey (+36.1 percent) and Orange (+34.7 percent).
“Multiple factors may be driving cash sales,” said Schnapp. “Silicon Valley cashing out, stock market volatility, and increased foreign investment all likely combined to move cash towards the perceived safety of the California real estate market.”
Source: Property Radar