Existing-Home Sales in California Rise 6.6% in May

The California residential real estate market continued to sizzle in May even as the nationwide pace of home sales continued to cool, according to sales reports released Friday.

Statewide sales of existing detached homes in May rose 6.6% from year-ago levels to an annualized, seasonally adjusted rate of 677,500 properties, according to the California Assn. of Realtors. The median sales price, meanwhile, jumped 11.1% to $225,480. The results exclude new homes and condominium sales.

“Continued strong demand and constraints on supply have combined to push both sales and the median home price to record levels,” said association President Diana Bull. “Consumers remain optimistic about the future direction of the Golden State, which is reflected in the May sales and price data.”

Nationwide, the residential market remained strong but showed signs that rising mortgage rates were beginning to take a toll on sales. Mortgage rates are close to their highest level in two years, with the average rate on 30-year fixed-rate mortgages rising to 7.15% in May from 6.92% in April.

The nationwide sales pace in May fell 4% from the previous month to a seasonally adjusted, annualized rate of 5.04 million homes, according to the National Assn. of Realtors. The median sales price rose 1.8% from the previous month’s $133,100.

“What we’re seeing is primarily an interest rate effect, and demand perhaps being sated a little bit,” said Greg Jones, an economist in Jackson, Wyo. “We’re looking at further slowing ahead.”

California prices were up in most areas on a year-over-year basis, but the pace of sales weakened in some areas in the face of a lack of inventory, according to industry observers. The median home price in Los Angeles County, for example, rose 8.6% from last year to $202,630, but sales activity dropped by 13%. (County sales results are not seasonally adjusted.)

In Orange County, the median sales price in May rose 4.6% to $275,260, while sales rose only 1.2%. The median price in Riverside and San Bernardino counties rose 3.4% to $126,530, and sales climbed 0.9%

Southern California real estate agents said sales activity remains brisk but has slowed from the frenzy of the spring--usually the busiest home-buying season. In April, Fred Sands Realtors agent Stephanie Vitacco closed escrow on 34 homes. In June, the San Fernando Valley agent expects to close the books on about 20 sales.

“It feels like the spring rush is over,” Vitacco said. “It’s still very busy, but it’s not insane.”

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Times Wire Services were used in compiling this report.

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Price Gains

The median price of an existing detached California home* sold in May rose more than 11% from the same month last year. Median sales price, in thousands of dollars:

May 1999: $225,480

*Excludes new-home and condominium sales.

Source: California Assn. of Realtors