Existing-Home Sales in State Up 25% Over a Year Ago
Even though housing prices continued to fall, the pace of existing-home sales in California rose nearly 25% last month compared with February 1995, the California Assn. of Realtors reported Monday.
Sales of existing single-family homes in February rose 24.7% to a seasonally adjusted, annualized pace of 506,430, according to the statewide realty group. February sales were up 7.7% from January’s revised rate of 470,320--the largest month-to-month gain since July 1993.
However, economists and real estate observers cautioned that the sales pace this year looks particularly strong in part because sales levels were so weak last winter, when interest rates were higher and the weather was bad.
“The extraordinary jump in California home sales during February can be partially attributed to the weak housing market that was experienced a year ago,” Rick Snyder, president of the real estate group and a San Diego broker, said in a statement. “Much of the improvement in home sales during February, however, was driven by the ongoing strengthening in California’s huge housing market.”
The median sales prices of single-family homes continued to slip last month, continuing a trend that began in the early 1990s. Statewide, the February median price was $172,970, down 1.2% from February 1995.
Still, the February sales report fell in line with other recent real estate surveys that indicate the state’s residential real estate market--despite some pockets of weakness--has stabilized and even begun to recover after six years of falling prices and sales.
“I think that the signs of the recovery are not only broad-based but consistent,” said Lou Piatt, president of real estate broker Prudential Jon Douglas Co. in Beverly Hills. “There has been a radical change in the confidence of buyers in the California marketplace.”
The February median price was down 2% from January. In Los Angeles County, the median price declined 4% to $170,210 compared with last year’s levels. The median price rose 5.3% in Orange County to $212,130.
“Despite the decline in California’s overall median sales price, several major regions of the state have been experiencing increases in home prices during the last several months,” said Leslie Appleton-Young, vice president of research and economics for the real estate association. “We expect this trend to continue and broaden to other regions of California as the year progresses and the state’s economic recovery gains momentum.”
Although real estate observers don’t expect February’s sales pace to be maintained, they do believe that the rebounding economy in the state, employment growth, relatively low interest rates and more affordable prices will help boost demand.
Esmael Adibi, director of the Center for Economic Research at Chapman University, expects sales to rise about 10% to 15% above 1995, and sees a 2% to 2.5% increase in the median sales price. Consumers “are now more confident about going into the housing market,” Adibi said. “This should be a healthy year for the real estate industry in terms of sales.”
However, the recovery in the state’s real estate sales and prices remains uneven. The average sales price in Southern California declined by 0.8% in February, with such areas as the Inland Empire showing an even steeper decline, according to TRW REDI Property Data, a real estate information services firm.
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U.S. Sales of Existing Homes
Seasonally adjusted annual rate, in millions of units:
February, 1996: 3.96
Source: National Assn. of Realtors
California Sales of Existing Home
Seasonally adjusted annual rate, in thousands of units:
February, 1996: 506.4
Source: California Assn. of Realtors
