LOS ANGELES — A run-up in home prices, coupled with higher interest rates, put downward pressure on housing affordability and led to the fourth straight month of sales declines in November, the California Association of Realtors reported.
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“Improving home prices are a double-edged sword for the housing market. While welcomed news for homeowners and prospective sellers, diminished affordability is squeezing out many buyers and dampening their enthusiasm for home purchasing,” said 2014 CAR President Kevin Brown. “Buyers are playing the waiting game and putting their home search on hold until prices stabilize and more inventory becomes available in the market.”
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 387,520 units in November, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide. Sales in November were down 3.4 percent from a revised 401,000 in October and down 12 percent from a revised 440,250 in November 2012. The November 2013 figure was the lowest since July 2010. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The statewide median price of an existing, single-family detached home slipped 1.2 percent from October’s median price of $427,290 to $422,210 in November. November’s price was 22.2 percent higher than the revised $345,560 recorded in November 2012, marking the 17th straight month of double-digit annual gains. 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.
“Sales reached their highest level in the fourth quarter of 2012, when mortgage rates bottomed out last November. While diminishing housing affordability played a big role in the larger than expected decrease in home sales this November, exceptionally strong sales last year was another factor for the double-digit year-to-year decline,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “The demand for housing could remain soft in the upcoming months as buyers and sellers continue to search for a level playing field in the market.”
Other key facts of CAR’s November 2013 resale housing report include:
• The available supply of existing, single-family detached homes for sale edged up in November to 3.6 months, up from October’s Unsold Inventory Index of 3.4 months. The index was 3 months in November 2012. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.
• The median number of days it took to sell a single-family home also increased to 36.7 days in November, up from 33.1 days in October, but was down from 37.5 days in November 2012.
• Mortgage rates rose in November, with the 30-year, fixed-mortgage interest rate averaging 4.26 percent, up from 4.19 percent in October and up from 3.35 percent in November 2012, according to Freddie Mac. Adjustable-mortgage interest rates in November averaged 2.61 percent, down from 2.63 in October and up from 2.57 percent in November 2012.