Home sales fall in California
Rising borrowing costs, escalating prices pressure sales
Home sales fell in California last month as the state felt the pressure from two separate trends: rising prices driven by demand and increased borrowing costs on the mortgage finance side, research firms say.
Data service provider DataQuick says 33,429 new and resale houses and condos sold in the state last month, an 8.3% drop from 36,468 in October and a 10.8% drop from 37,481 sales in Nov. 2012.
Comparatively, the state’s sales are up from a low of 25,578 in 2007, but still down from a high of 60,326 during the expanding housing bubble of 2004.
Sales last month fell enough to sit 15.1% below the average 39,357 sales for all November statistics recorded since 1988, DataQuick said.
Sales figures in the state moved in the opposite direction of prices as the median sales price edged up to $360,000 – a 0.8% climb from $357,000 in October and 23.7% higher than $291,000 last year.
November’s median price is the 21st consecutive month of year-over-year growth, and the 12th month in which the price gain went above 20%.
Homeownership overall became more expensive in California last month with the typical monthly mortgage payment hitting $1,418, up from $1,395 a month earlier and from $1,026 a year ago.
Research firm PropertyRadar released similar findings for November, noting that single-family home sales fell 11.5% from October and 14.3% from a year ago.
The report ties the slow down to higher borrowing costs, which are freezing out certain buyers.
"In three out of the past four months, California real estate sales have posted year-over-year declines," said Madeline Schnapp, director of economic research for PropertyRadar. "The 100+ basis point increase in borrowing costs since May has definitely slowed market activity."
With fewer distressed sales weighing down prices, home values continue to rise putting more strain on new borrowers’ pocketbooks. In November, non-distressed property sales grew 17.9% while distressed property sales declined 54.8%.
The California Association of Realtors (C.A.R.) released similar data earlier this week.