Home Sales Decline in California : Housing: The drop in mortgage rates fails to spur sales in the state, but sales of existing homes across the country edge up in October.
The lowest mortgage rates in more than a decade failed to boost housing sales in California last month, but the low rates helped push national sales of existing homes up a slim 1% in October, according to real estate trade groups.
The state’s 2% decline in home sales from September to October was 6% below the pace in October, 1990, the California Assn. of Realtors reported. The slump was in contrast to a 3.8% increase posted over the entire Western region in October.
Meanwhile, the median home price in California slipped 1.1%--to $196,440 in October from $198,630 in September.
The National Assn. of Realtors said the small national gain--the first in four months--pushed sales up to a seasonally adjusted annual rate of 3.15 million units. Sales were up everywhere except California and the Northeast.
The modest improvement came amid mounting concern over the economy, which has been hampered not only by lackluster real estate sales, but also by tightfisted consumers and widespread layoffs. Analysts noted that the nearly 10-month supply of homes on the market continues to far outweigh demand.
California, envied earlier this year when its home sales held up amid the recession, now appears to be falling behind the rest of the nation on the road to recovery.
But analysts took encouragement from the national rise in existing-home sales as well as a 7.3% jump in construction of new homes and apartments last month, the largest advance in eight months.
The pickup in nationwide existing-home sales was the first since a 1.4% gain in June. Sales fell sharply in July, August and September as consumers grew uneasy about the economy. But the improvement was tempered somewhat by the easing of sales prices.
The national median price for an existing home was $99,200, down 0.5% from September’s median price of $99,700. However, the median price was 6.8% more than the $92,900 fetched in October, 1990. The median is a midpoint, with half the homes sold during the month going for more and half for less.
Analysts said the improvement in new- and existing-home sales may be an early indication that the lowest mortgage rates in 14 years are finally having an impact on the housing industry.
“Low rates are winning the tug-of-war. After months of being torn between whether to buy now with low rates or wait longer for a brighter economic outlook, buyers have given in to rates,” said Dorcas T. Helfant, president of the National Assn. of Realtors.
The Federal Home Loan Mortgage Corp. reported that the average commitment rate for 30-year, fixed-rate mortgages fell to 8.84% in October from 9.01% in September.
By region of the country, the biggest sales increase came in the West, where existing homes were sold at a seasonally adjusted annual rate of 540,000 units, up 3.8% from September.
Sales were up 3.5% in the Midwest to an annual rate of 880,000 units, while sales in the South edged up 0.8% to 1.24 million units.
The only area of the country suffering a drop in sales was the Northeast, where sales fell 5.8% to an annual rate of 490,000 units.
California Home Sales October, 1991, regional sales and price activity. Regional data is for single-family homes only and is not seasonally adjusted.
Percent Percent Percent Percent change change change change in in in sales in sales price price activity activity Median from from from from price Sept.,’91 Oct.,’90 Sept.,’91 Oct.,’90 California (single $196,440 -1.1% 4.7% -2.0% -6.0% family) California (condo) $145,610 -0.7% 3.0% 10.1% -8.3% Central Valley $116,830 0.4% 3.5% -0.1% -12.1% High Desert* $102,500 3.2% -1.0% 8.3% -11.1% Los Angeles $213,710 -3.6% 1.7% -3.8% -17.7% Monterey $220,090 -5.0% -3.3% 41.0% 58.9% Northern $135,360 7.0% 0.5% -25.7% -29.3% California Northern $186,520 -4.7% 2.0% 19.6% 7.9% Wine Country Orange County $235,790 -1.7% -0.2% -9.6% 10.5% Palm Springs/ Lower Desert* $109,000 -16.8% -3.9% 0.7% -11.7% Riverside/ San $138,660 1.2% 6.6% -7.1% -24.0% Bernardino Sacramento** $137,000 0.4% 0.2% 0.2% -21.7% San Diego $183,650 1.4% 2.3% 10.0% -7.5% San $250,000 -1.8% 1.1% 6.6% 12.0% Francisco Bay Area Santa Barbara* $215,740 15.6% 7.2% 29.8% 0.0% Santa Clara $253,480 -0.5% -0.4% 8.5% 17.3% Ventura $233,540 -2.1% -2.5% 9.8% 7.5%
Based on closed escrow sales of single-family, detached homes only. Reported month-to-month changes in sales activity may overstate actual changes because of the small size of individual regional samples. Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.
*Due to the small sample size in these areas, prices and activity changes may be overemphasized.
**Source: Sacramento Assn. of Realtors.
Source: California Assn. of Realtors
