Moderating home price appreciation and improving housing inventory combined to spur California's housing market in February as existing home sales increased from both the previous month and year.
The California Association of Realtors reported that closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 393,360 units in February.
According to information collected by CAR from more than 90 local Realtors' associations and MLSs statewide, the statewide sales figure represents what would be the total number of homes sold during 2016 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The February figure was up 2.6% from the revised 383,480 level in January and up 6.4% compared with home sales in February 2015 of a revised 369,630. February's sales level was below the 400,000 level for the second straight month.
"While it's encouraging that home sales were higher from both the previous month and year, it's important to remember that sales were unusually low in the first quarter of 2015 when the housing market got off to a slow start," said CAR President Pat "Ziggy" Zicarelli.
"Market activity continues to be dampened by low housing inventory as baby boomers stay in their homes longer and new home construction, while improving, falls below needed supplies," Zicarelli explained.
After accelerating for five straight months, the median price of an existing, single-family detached California home fell 4.7% in February to $446,460 from $468,330 in January. February's median price was 3.8% higher than the revised $429,930 recorded in February 2015.
The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.
"February's home price increase was the slowest rate of growth in six months, reflecting a shift in sales toward lower-priced, inland areas as buyers feeling the affordability crunch and tight supplies move away from urban cores to find affordable housing," said Leslie Appleton-Young, CAR's vice president and Chief Economist.
"Home buyers in the Bay Area are seeking to buy in Contra Costa, Solano, or Sonoma counties, rather than San Francisco, and Southern California home buyers are moving inland to Riverside, San Bernardino, or Central Valley areas, where housing inventory is more abundant and affordable," she added.
Other key points from CAR's February 2016 resale housing report include:
The number of active listings increased for the second consecutive month after declining for five straight months. Active listings increased 4.1% from January on a statewide basis.
At the regional level, total active listings in February increased from the previous month in Southern California (2.7%) and the Bay Area (27.7%) but dipped slightly in the Central Valley (-0.4%).
CAR's Unsold Inventory Index rose to 4.6 months in February from 4.3 months in January, primarily due to slower sales and an increase in active listings. The index stood at 4.9 months in February 2015.
The median number of days it took to sell a single-family home declined in February to 41.6 days, compared with 44.5 days in January and 44.1 days in February 2015.
According to CAR's sales-to-list price ratio, properties are generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices.
The statewide measure suggests that homes sold at a median of 98.2% of the list price in February, up slightly from 97.9% at the same time last year.
The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 101.6% in February, essentially unchanged from 101.5% a year ago.
The average price per square foot for an existing, single-family home was $222 in February 2016, down from $227 in January and up from $219 in February 2015.
San Francisco continued to have the highest price per square foot in February at $810/sq. ft., followed by San Mateo ($768/sq. ft.), and Santa Clara ($567/sq. ft.). The three counties with the lowest price per square foot in February were Siskiyou ($109/sq. ft.), Madera ($116/sq. ft.), and Yuba ($117/sq. ft.).
Mortgage rates dropped in February, with the 30-year, fixed-mortgage interest rate averaging 3.66%, down from 3.87% in January and 3.71% in February 2015, according to Freddie Mac.
Adjustable-mortgage interest rates also declined, averaging 2.83% in February, down from 2.98% in January and 2.97% in February 2015.