v.19 n. 09 – Released February 24, 2015
This Week’s Headlines:
- California Home Sales and Median Prices in January
- Events of Interest
- February 26, 2015: LAEDC Open-House with Dr. Christine Cooper, LAEDC Institute for Applied Economics
The California Association of Realtors released their report on California existing home sales and median prices in January. The statewide median price rose over the 12 months ending in January by 3.4% to $426,790. On a year-over-year basis, median prices have been on the rise for more than two years, but the gains have narrowed considerably from a year ago. Compared with December, the median price was down by 5.9% and has declined on a month-to-month basis in four of the last five months.
Even with home price increases are starting to level off and interest rates continuing to decline, affordability is still a big constraint for California’s housing market. Strong job and income growth particularly in the San Francisco Bay area, coupled with lack of supply has caused prices to appreciate at much faster rate than other regions of California. In the Los Angeles metro area, the median price increased at a slower rate than the statewide average, inching up by 2.0% to $395,200 in January, while in the San Francisco Bay Area, prices moved higher by 6.2% to $669,590.
Statewide, the number of single-family homes that closed escrow in January fell by 2.7% to 351,890 units (seasonally adjusted, annualized rate) and declined from December by 3.9%. Comparing sales in the Bay Area with the Los Angeles Region reveals another stark contrast. Owing to the decline in affordability and tight supply in the Bay Area, sales slid by 14.7% over the year in January versus a 7.1% drop in the Los Angeles metro region.
Inventories throughout much of the state remain low by historical norms, but have shown improvement over the year. Statewide, the inventory of single-family homes was 5.0 months in January, up from 4.3 months a year ago. In the Los Angeles metro region, there was a 5.5-month supply of homes versus 4.5 months in January 2014, while in the San Francisco area the inventory of homes for sale was just 3.1 months, up from 2.8 last year. Mortgage interest rates fell again in January. The average 30-year fixed rate was 3.67%, down from 3.86% in December and 4.43% a year ago.
Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide median price and sales figures are seasonally adjusted, regional and county figures are not. The median price typically goes sideways or edges down from late summer through February as the market moves past its typical spring-summer peak. Meanwhile, sales that are not adjusted for seasonality are usually quite a bit lower from November through February compared with the rest of the year.
- Los Angeles County: unit sales declined by 11.6% over the year in January while the median price rose by 4.3% to $441,610.
- Orange County: sales dipped by 4.3% last month with the median price increasing by 3.1% to $674,340.
- Riverside County: sales of existing homes dropped by 10.9%; the median price also declined last month by 2.6% to $306,060.
- San Bernardino County: sales were up by 8.2% in January; the median price rose by 8.7% to $206,660.
- San Diego County: unit sales edged down by 0.4% and the median price rose by 3.6% to $496,380.
- Ventura County: Sales were flat over the year while the median price jumped by 9.2% to $582,630.
February 26, 2015: LAEDC Open-House with Dr. Christine Cooper, LAEDC Institute for Applied Economics
Location: LAEDC Offices at 444 South Flower Street Suite 3700
Learn more about the latest reports completed by Dr. Cooper and her team. The LAEDC Institute for Applied Economics provides in-depth market intelligence and independent analysis on the key industry clusters that propel our regional economy. In addition, the Institute performs custom research as commissioned by clients, including economic impact analyses, policy analysis, workforce development analyses, and more. This analysis helps guide workforce development initiatives and effective public policy, and quantifies economic impacts. Public and private organizations seek customized, objective studies from the Institute to inform their decisions.