Housing Market Posts Solid Performance in 2017
Amid the lowest housing inventory levels in more than 13 years, existing home sales still eked out a year-over-year gain, while the median sales price posted a solid annual increase, the Arcadia Association of Realtors® said recently.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 420,960 units in December, according to information collected by the California Association of Realtors® from more than 90 local Realtor® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The December sales figure was down 4.4 percent from the 440,340 level in November and up 1.4 percent compared with home sales in December 2016 of a revised 415,280.
For 2017 as a whole, a preliminary 423,760 homes closed escrow in California, up 1.4 percent from 2016’s pace of 417,720. After a strong first quarter start to 2017, sales momentum lost steam throughout the remainder of the year, and year-to-date sales growth declined steadily to hit the lowest level at the end of the year.
“A severe shortage of homes for sale continues to push up home prices and erode affordability, which in turn is subduing home sales,” said AAR President, Margaret Garemore. “What’s more, with the passage of the tax reform bill that makes home buying less attractive, homeownership costs will increase for many, which could reduce the desire and demand for buying a home.”
The statewide median price continued to grow at a strong pace over last year and remained above the $500,000 mark for the tenth straight month. The $549,560 December median price was 0.5 percent higher than November’s $546,820 and 7.6 percent higher than the revised $510,560 recorded in December 2016. The year-over-year price gain has been growing at or above 7 percent for six of the past seven months.
“California’s housing market turned in a respectable performance throughout 2017, with home sales increasing 1.4 percent and the median price climbing 6.9 percent for the year as a whole to reach $537,860 in 2017,” said AAR Chief Executive Offer, Andrew Cooper. “Looking ahead, the market will remain solid but both sales and prices will be impacted by inventory shortages, impending interest rate hikes, and general economic factors including the effects of tax reform.”
– Existing, single-family home sales totaled 420,960 in December on a seasonally adjusted annualized rate, down 4.4 percent from November and up 1.4 percent from December 2016.
– December’s statewide median home price was $549,560, up 0.5 percent from November and up 7.6 percent from December 2016.
– Housing inventory hit the lowest level observed in 13 years, with the unsold inventory index falling to 2.5 months in December.
Representing local Realtors® in the San Gabriel Valley for 93 years, the Arcadia Association of Realtors® (www.TheAAR.com) is one of the oldest trade organizations in California. The AAR is dedicated to the advancement of professionalism in real estate and is an advocate for private property rights and is headquartered in Arcadia.