Sales Flat in February, Median Price Falls 2.3 Percent

CASales 2 2016California single-family home and condominium sales were 24,409 in February 2016, nearly unchanged from a revised 24,273 in January 2016. Sales volumes are typically low this time of year, 43.5 percent below last year’s peak summer sales. On a year-ago basis sales were down 2.4 percent from a revised 25,022 in February 2015. Condominium sales represented 19.4 percent of total sales compared to 18.6 percent in February 2015. In February 2016, single-family home sales were nearly unchanged for the month but were down 2.1 percent from February 2015. Meanwhile, condominium sales gained 1.1 percent for the month but were flat year-over-year.

“California’s real estate market went into early hibernation starting in October 2015,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “On a year-over-year basis, sales have been remarkably flat. That’s good news because the California real estate market continues to shrug off broader national and global financial turmoil. The bad news is that resilience has translated into flat markets for the foreseeable future.”

“Lack of inventory and high prices continues to stifle activity”, said Schnapp. “Our October 2015 headline, ‘Flat is the New Black’, looks more and more likely for the rest of 2016 as economic growth slows and real wages remain stagnant.”

The February 2016 median price of a California home was $390,000, down 2.3 percent from a revised January 2016 price of $399,000. On a year-ago basis, median home prices were up 3.7 percent from $376,000 in February 2015. The median price of a condominium was $379,000, down 2.8 percent from $390,000 in January 2016 but up 3.7 percent from $370,000 from a year ago.

“Not surprisingly given current economic conditions, year-over-year price growth halved this past month,” said Schnapp. “Price appreciation has definitely slowed which is good news for a market suffering from sticker shock.”

Cash sales of single-family home and condominiums were up 17.0 percent from January 2016 but down 1.9 percent from February 2015. February cash sales were 25.3 percent of total sales, the highest in 23 months. Of the 26 largest counties in California, the counties with the highest percentage of cash sales were San Francisco (37.3 percent), Marin (36.2 percent), Santa Cruz (34.0 percent), Tulare (30.2 percent) and Fresno (28.1 percent).

“While the rest of the market went into hibernation for the winter, cash buyers came out in force at the highest level in almost two years,” said Schnapp. “Given recent price trends and volatile alternatives, buyers flush with cash are probably motivated to invest in real estate before prices rise with the spring and summer season.”

Source: Real Property Report