California home and condominium sales in May were 37,093, an increase of 2.2% from April’s 36,287, but a decrease of 4.7% from last year’s 38,921, according to a report from PropertyRadar, a provider of software, data and analysis products for Real Estate professionals.
“Sales continue to be lackluster state-wide,” said Madeline Schnapp, PropertyRadar director of economic research. “Without an increase in affordable inventory, high prices continue to depress sales.”
“Unfortunately, our 2016 forecast of anemic sales in the face of high prices and low inventory is shaping up to be right on,” Schnapp said.
So far this year, sales total almost 156,000, down 3.8% from the same time period in 2015, and about the same as in 2014. In fact, year to date sales in 2014 and 2016 were at their lowest since 2008.
The median home price in California remain the same month-over-month at $430,00, however it increased 6.2% annually from last year’s $405,000.
“Price appreciation took a breather this past month amidst lackluster sales,” Schnapp said. “How many buyers are there in the Bay Area willing to spend a million dollars on a 1,200 square foot, 2-bedroom, 1-bath home built in 1961? At some point buyers are just going to say, ‘No Thank You’.”
The most home-price appreciation occurred in Santa Clara county at 15.1%. In second was Contra Costa at 13.1%, Monterey at 12.4% and Santa Cruz at 12.2%.
The total number of cash sales increased by 1.5% from April to May’s 20.7% of total home sales. On the other hand, this is down 6.7% annually from last year’s 36.4% of total market sales.
Despite lower year-over-year sales volumes, cash sales continue to represent one in four transactions,” Schnapp said. “As the yield on the 10-year U.S. Treasury note continues to fall, parking cash in real estate continues to look attractive.”
“We believe one of the reasons cash purchases remain high is due to a phenomena we have named ‘Millennial Phantom Ownership’,” Schnapp said. “It appears there are increasing numbers of parents and grand-parents of Millennials buying houses and condominiums as a place for their children to live while they attend college or start new careers and ‘safely’ park cash.”