LOS ANGELES — California home sales declined for the third straight month in October as economic uncertainty surrounding last month’s government shutdown and a typical seasonal slowdown dragged down the state’s home sales, although sales of condominiums and townhomes continued to be strong, the California Association of Realtors reported.
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“As anticipated, the housing market was disrupted by the closure of the federal government in October, which prolonged the loan approval process and led to the delay of many home closings, especially on FHA transactions,” said 2014 CAR President Kevin Brown. “That said, we are returning to a market that’s more balanced than we’ve seen in recent years, with home price gains that are more sustainable and a sales pace that’s characteristic of a normal environment.”
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 401,170 units in October, according to information collected by CAR from more than 90 local Realtor associations and MLSs statewide. Sales in October were down 2.7 percent from a revised 412,260 in September and down 11.1 percent from a revised 451,090 in October 2012. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the October 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 edged down 0.3 percent from September’s median price of $428,740 to $427,290 in October. October’s price was 25.3 percent higher than the revised $340,910 recorded in October 2012, marking the 16th 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.
“The recent jump in interest rates, coupled with the run-up in home prices since the beginning of this year, lowered housing affordability. As such, many buyers are considering more affordable options such as condos and townhomes, especially in the San Francisco Bay Area, where there is a greater abundance of these property types,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “As housing demand has cooled off in recent months, however, the statewide median price is finally showing some signs of stability. As we enter the slower home buying season, we expect home prices to be capped by seasonal factors and annual price gains to continue to taper off in the coming months.”
Other key facts of CAR’s October 2013 resale housing report include:
• The available supply of existing, single-family detached homes for sale dipped in October to 3.4 months, down from September’s Unsold Inventory Index of 3.6 months. The index was 3.1 months in October 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 33.1 days in October from 29.6 days in September, but was down from 38 days in October 2012.
• Mortgage rates declined in October, with the 30-year, fixed-mortgage interest rate averaging 4.19 percent, down from 4.49 percent in September but up from 3.38 percent in October 2012, according to Freddie Mac. Adjustable-mortgage interest rates in October averaged 2.63 percent, down from 2.67 in September but up from 2.59 percent in October 2012.