California July Home Sales Barely Higher Than a Year Earlier

Median Sale Price Dips Below June’s Record High

By Andrew LePage Housing Affordability, Real Estate

California eked out a small year-over-year gain in July home sales following two consecutive months of annual declines, while the median price paid for a home in July slipped below the all-time high of $500,000 in June.

California Total July Home Sales for Each YearAn estimated[1] 41,441 new and existing houses and condos sold statewide in July 2018 (Figure 1), down 7.4 percent from 44,732 sales in June 2018 and up 1.2 percent from 40,952 sales in July 2017, CoreLogic public records data show. The average change in sales between June and July since 2000 is a decline of 6.6 percent. Sales had fallen year over year in the prior two months, with this May posting a 0.2 percent decline followed by a 9.6 percent drop in June.

California Median Sale PriceJuly 2018 sales were 14.1 percent below the average number of homes sold in July since 2000. A caveat to this July’s small year-over-year sales increase: July had one more business day for recording deals compared with July 2017 and it’s likely that without that extra day sales would have declined slightly on a year-over-year basis. The number of homes that sold this July for less than $500,000 fell 7.3 percent year over year, while sales of $500,000 or more rose 9.7 percent and sales over $1 million increased 21.1 percent.

The median price paid for all new and existing houses and condos sold across California in July 2018 was $496,000 (Figure 2), down 0.8 percent from a record $500,000 in June 2018 and up 6.7 percent from $465,000 in July 2017. The year-over-year increase in the median sale price has trended lower in four out of the last five months (Figure 3). Adjusted for inflation, the July 2018 median remained 14.4 percent below its March 2007 peak. 

The state’s median sale price has risen year over year for 77 consecutive months, since March 2012.

Year Over Year Change in California's Median Sale PriceIn the six-county Southern California[2] region a total of 21,277 new and existing houses and condos sold in July 2018, down 6.6 percent month over month from 22,786 sales in June 2018 and up 0.3 percent year over year from 21,214 sales in July 2017. The July 2018 median sale price was $530,000, down 1.3 percent month over month from an all-time high of $537,000 in June 2018, and up 5.8 percent year over year from $501,000 in July 2017.

In the nine-county San Francisco Bay Area[3], a total of 7,547 new and existing houses and condos sold in July 2018, down 10.2 percent month over month from 8,403 sales in June 2018 and down 0.3 percent year over year from 7,567 sales in July 2017. The median sale price in July 2018 was $850,000, down 2.9 percent from a record $875,000 in June and May 2018, and up 11.4 percent year over year from $763,000 in July 2017.

Adjustable-Rate Mortgage ShareHigher home prices and mortgages rates have helped spur more interest in adjustable-rate mortgages, or ‘ARMs,’ which have lower initial rates and payments. In July 2018, ARMs represented 12.3 percent of statewide home purchase loans, up from 11.1 percent in July 2017 but well below the pre-bust ARM share level, which peaked at about 77 percent in June 2005 (Figure 4). However, the ARM share has increased more over the past year in some pricier counties. For example, in Orange County ARMs made up 19.4 percent of July 2018 purchase loans, up from 16.1 percent a year earlier. In Alameda and San Francisco counties, ARMS made up 28.0 percent and 40.1 percent of purchase loans, respectively, this July, up from 25.1 percent and 36.0 percent in July 2017.

[1] Because of late data availability, July 2018 sales were not complete in some counties.

[2] Southern California comprises San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties.

[3] The San Francisco Bay Area comprises Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties.

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