California’s housing market remains stuck in a standstill, with August’s sales numbers showing a weakening market.
According to PropertyRadar’s August Real Property Report, California single-family home and condominium sales fell 13.1% to 36,733 in August from 42,261 in July but were up 3.1% from 35,613 in August 2014.
The yearly increase in sales was primarily driven by a 6.4% increase in non-distressed property sales.
At the end of last year, PropertyRadar predicted a stronger year than 2014, but this didn’t fully come into fruition.
California’s housing already spent most of 2014 in low gear, with high home prices and relatively tough lending standards.
“We had a couple of strong months this year but August sales are a clear reminder that California sales are still quite weak,” said Madeline Schnapp, director of economic research for PropertyRadar.
“Year-to-date sales volumes are lower than 4 of the last 6 years, only slightly better than 2007, and far below pre-crisis levels.”
The median price of a California home in August was $415,000, down 1.2% from a revised $420,000 in July.
However, Schnapp added, “The lack of price appreciation in August was welcome news for buyers.”
“Median prices peaked at $420,000 in July, its highest level since November 2007. Without higher sales volumes it is unlikely prices will push higher particularly since we are heading into the fall and winter selling season.”
On a year-over-year basis, the median price of a California home was up 4.5% from $397,000 dollars in August 2014 down from the double digit annual price appreciation that characterized the market in 2013 through mid-2014.
In addition, cash sales fell 8.1% in August to 7,730 and represented 21% of total sales up 1.1% from 19.9% of total sales in July.
Cash sales as a percentage of total sales remain elevated but have been steadily declining since reaching a peak of 40.0 percent of total sales in August 2011.
“Cash sales increased as a percent of total sales in August,” said Schnapp. “We are looking forward to see what impact the stock market volatility in the past two months will have on housing, but given escrow timing, we don’t believe it had any impact in August.”