April New-Home Sales in California Fall 12% From 1999
Successive mortgage rate hikes and a volatile stock market created the biggest year-to-year drop for California new-home sales in more than four years, according to DataQuick Information Systems, a La Jolla-based real estate research firm.
New-home sales in April totaled 5,514, down about 12% from 6,251 new homes sold in the state for the same period last year, as many buyers took a wait-and-see attitude toward purchasing a new home in the normally busy spring selling season. The drop was the largest since September 1995, when new-home sales in the state fell 19% from the year-earlier period.
Rising prices also contributed to declines in California sales of both new and existing homes in April.
Experts said the numbers look worse than they are because new-home sales in 1999 hit record highs.
“We’re coming off an incredibly strong year,” said John Karevoll, a DataQuick analyst. “You need to go back to 1989 to come up with numbers that are as strong as they are today, with the exception of last year.”
In addition, new-home sales in the state for the first four months of this year are on par with sales for the same period last year, with about 23,116 new homes sold from January to April in 2000, down 1.5% from 23,471 sold in the first four months of 1999.
The drop-off in demand was accompanied by higher median prices for new homes, with April coming in at $255,500, up 11.1% from $230,000 for the same period a year earlier, the DataQuick survey showed. Higher median home prices reflected continued tight inventories for both new and existing homes in the state.
Although new-home sales are slowing, analysts said transactions could pick up this summer. The decrease also doesn’t seem to be discouraging builders.
“Mortgage rate increases are pricing [some] people out of the market, but demand still seems to be strong,” said John Burns, a principal at the Meyers Group, an Irvine-based provider of new-home real estate information. “Enough builders are still selling all the homes they are building and getting the prices they are asking.”
