California single-family home and condominium sales were 41,291 in June 2016, up 8.1 percent from a revised 38,198 in May 2016. On a year-ago basis, sales were down 4.5 percent from 43,227 in June 2015. Year-to-date sales (January through June 2016) totaled 199,310 properties, down 2.8 percent from the same time period in 2015. January through June sales have oscillated around the 200,000 mark since 2009. The June 2016 median price of a California home was $441,250, a 9-year high and an increase of 1.4 percent, from a revised $435,000 in May. On a year-ago basis, median home prices were up 6.3 percent from $415,000. The median price of a condominium was $415,000, up 1.2 percent from $410,000 in May 2016 and up 3.8 percent from $400,000 in June 2015. At the county level, median home prices in 18 of California’s 26 largest counties reached 9-year highs.
“Sales have trended mostly sideways for eight consecutive years,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “While sales volumes appear to have hit a ceiling, prices continue to reach new heights. Lack of inventory, near record low mortgage interest rates, and increase in demand due to California’s continued economic vitality are pushing prices higher.”
“The increase in home prices is not surprising given the fact that new housing inventory is difficult to deliver within California’s burdensome regulatory environment,” said Schnapp. “While inventory remains constrained, California’s economic growth engine continues to churn out an impressive number of new jobs, 448,000 in 2015, driving up demand. That, combined with investors buying real estate to shelter cash, continues to push up prices beyond reasonable levels.”
Cash sales of single-family homes and condominiums in June 2016 were 19.7 percent of total sales. Cash sales were up 1.6 percent for the month but down 7.8 percent from June 2015. Within the 26 largest counties in California, the counties with the highest percentage of cash sales were Sonoma (27.2 percent), Monterey (24.9 percent), San Francisco (24.3 percent), Santa Cruz (23.5 percent) and San Luis Obispo (23.3 percent). “Cash sales remain elevated despite high prices,” said Schnapp.
“As investment alternatives returning positive yield become few and far between, and record amounts of cash is now sitting on the sidelines searching for safety, some of that cash is clearly finding its way into the real estate markets.”
Source: Real Property Report