Despite a tepid year, the California housing market stayed in line with 2014 predictions and hopefully set the pace for a better 2015, according to PropertyRadar’s December Real Property Report.
Single-family home and condominium sales increased 7% to 27,770 units, up from 25,964 in November, but down 11.4% from 31,340 in December 2013. Total sales for the entire year fell 11.7% from 2013 and were the lowest since 2007.
“As we predicted early in 2014, sales volume stayed near 7-year lows throughout 2014 because prices rose too far too fast in 2012 and 2013,” said Madeline Schnapp, director of economic research for PropertyRadar.
However, Schnapp added that although prices are likely still too high, 2015 may fare slightly better thanks to mortgage interest rates trending lower and loosening lending standards.
Median home prices have been stagnant for most of the second half of 2014, with December no different.
The December median price of a home was nearly unchanged at $385,000, down $2,500, or 0.6% from $387,500 in November.
The number of homeowners in a negative equity position fell 1.1% to 987,000 in December, from 998,000 in November. In December, approximately 11.4% of California homeowners owed more than their home was worth, down from 1.4 million, a decline of nearly 28.5% from a year ago.
“The California real estate market continues to show steady improvement,” said Schnapp. “Nearly one in three homeowners with negative equity in 2014 saw their finances improve significantly as they transitioned from negative to positive equity this past year. Many homeowners are now free to participate in the real estate market or refinance their homes.”
In addition, foreclosure starts, notices of default, increased 8.1% between November and December but are down 14.3% from December 2013.
The monthly increase is likely due to increased volatility around the holiday season. Foreclosure sales gained 6.9% for the month but were down 21.6% for the year.