The price for a home in California just got more expensive.
The statewide median price exceeded $800,000 in July for the fourth straight month and saw its first year-over-year increase in nine months, according to the July home sales and price report from the California Association of Realtors.
July's statewide median price of $832,340 was up 0.2% from the median price of $830,870 a year ago.
The year-over-year price gain reflects a continued strong demand for homes despite rising interest rates. The 30-year, fixed-mortgage interest rate averaged 6.84% in July, up from 5.41% during the same time last year, according to calculations based on Freddie Mac’s weekly mortgage survey data.
While home prices saw an increase, the number of home sales saw a decrease. Sales of single-family homes statewide totaled 269,180 in July, a 3% drop compared to the previous month of June when 277,490 homes sold, and a 9% decrease from a year ago when 295,770 homes sold.
On the bright side, this is the first time in more than a year that sales declined by less than 10% on a year-over-year basis. July's low inventory contributed to a lower sales base, according to the report.
“Despite slowing home sales in the past couple of months, housing demand remains resilient, and the market continues to be competitive,” Jennifer Branchini, president of the California Association of Realtors, said.
Midpeninsula reflects broader trend
At the local level, San Mateo and Santa Clara counties also saw increases to their median home prices, and the number of home sales in each county continued to decline due to the severe lack of homes available for sale.
The median sales price for a single-family home in San Mateo was $1.984 million in July, a percent higher compared to the median price of $1.965 million recorded in July 2022 and 2.7% less than June's median price of $2.039 million. San Mateo County's July home sales were down by 18.6% compared to the same last year and fell 29.3% compared to the previous month of June. Homes stayed on the market a median of 11 days in July, compared with 10 in June and 12 in July 2022.
The median price for a single-family home in Santa Clara County was $1.8 million in July, or 3.4% higher than median price of $1.74 million recorded during the same time last year and 1.4% below the median price of $1,825 million recorded the previous month in June. Santa Clara County's July sales were down 6.2% compared to the same time last year and fell 23.1% from the previous month of June. Homes stayed on the market a median of eight days in July, the same as the previous month of June. Last year, homes stayed on the market for 14 days, according to the report.
"The fact that homes are not staying on the market for very long despite elevated interest rates indicates demand for homes remains strong," said Jim Hamilton, president of the Silicon Valley Association of Realtors. "While there appears to be an overall slightly downward price adjustment in the median price, prices continue to be unaffordable for first-time and middle-income homebuyers. Lower interest rates would help tremendously. Our hope is that the (Federal Reserve) will temper its aggressive approach to interest rates, as inflation appears to have moderated."
On Aug. 17, mortgage interest rates surged over 7%, rising to their highest level in over 20 years, according to Freddie Mac. Rates have since hovered around that percentage, or even higher, for 30-year, fixed-interest loans.
A nationwide problem
The lack of housing inventory is a nationwide problem, according to the National Association of Realtors, which recently came out with its nationwide report on July existing home sales. The report indicates the annual median home price gain nationwide was 1.9%, while home sales receded 16.6% from one year ago.
“Two factors are driving current sales activity – inventory availability and mortgage rates. Unfortunately, both have been unfavorable to buyers,” Lawrence Yun, chief economist for the Naitonal Association of Realtors, said. “Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again."
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
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