June was a very good month for real estate in the Golden State, as California existing home sales hit a nearly four-year high, according to a new report from the California Association of Realtors.
The CAR report showed that closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 450,960 units in June, the highest level in almost four years.
According to the CAR report, June was the fourth consecutive month that California’s existing home sales topped the 400,000 rate.
CAR’s report, which is based on information collected from more than 90 local Realtor associations and MLSs statewide, showed that June’s seasonally adjusted annualized rate of 450,960 units was an increase of 10% over May’s revised total of 409,840.
June’s double-digit increase over May marked the first double-digit monthly gain since January 2011, CAR’s report showed.
And, according to CAR President Pat Zicarelli, the demand for housing is going to stay high throughout the summer.
“Market conditions suggest that demand for housing will remain steady through the rest of the summer,” Zicarelli said.
“However, inventory is still tight, especially at the low end of the market, and this keeps competition for those homes at an extremely high level,” Zicarelli added. “The recent march of mortgage rates to ever lower levels will also add to the strong demand for entry-level homes.”
As Zicarelli said, the rising demand and short supply of available houses is putting “upward pressure” on prices in June.
According to CAR’s report, the median price of an existing, single-family detached California home increased in June by 5.5% to $519,440 from $492,320 in June 2015.
June’s median price was 0.1% lower than the revised $519,750 recorded in May 2016, CAR’s report showed.
“The annual gain in the median home price is being driven by more sales at the mid-segment housing market, which comprise at least half of the overall demand,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “Price growth appears to be cooling somewhat in San Francisco, where the 3.2% increase was less than the statewide gain of 5.5%.”
In terms of available inventory, the CAR Unsold Inventory Index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate, fell slightly to 3.2 months in June from 3.4 months in May.
The index also stood at 3.2 months in June 2015. At the state level, there were 2.6% fewer homes available for sale in June compared with a year earlier, CAR’s report showed.
According to CAR, the long-run average home supply is 6.1 months, indicating inventory levels are running at roughly 60% of normal.
Additionally, the CAR report showed that the average price per square foot for an existing, single-family home in California was $247 in June 2016, down from $248 in May, but up from $237 in June 2015.
On a county basis, San Francisco County had the highest price per square foot in June at $837/sq. ft., followed by San Mateo ($793/sq. ft.), and Marin ($633/sq. ft.). Counties with the lowest price per square foot in June include Siskiyou ($122/sq. ft.), Tulare ($126/sq. ft.), and Kern and Kings ($131/sq. ft.).