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Single-Family Homes

Existing-Home Sales Slide in December; 2016 Sales Best Since 2006

Source: National Association of Realtors®

Existing-home sales closed out 2016 as the best year in a decade, even as sales declined in December as the result of ongoing affordability tensions and historically low supply levels, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, finished 2016 at 5.45 million sales and surpassed 2015 (5.25 million) as the highest since 2006 (6.48 million).

In December, existing sales decreased 2.8 percent to a seasonally adjusted annual rate of 5.49 million in December from an upwardly revised 5.65 million in November. 

Lawrence Yun, NAR chief economist, said the housing market's best year since the Great Recession ended on a healthy but somewhat softer note. "Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market," he said. "However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December."

Added Yun, "While a lack of listings and fast rising home prices was a headwind all year, the surge in rates since early November ultimately caught some prospective buyers off guard and dimmed their appetite or ability to buy a home as 2016 came to an end."

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California Home Price Ends Year on High Note

Source: CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Despite strong headwinds of tight housing supplies and an affordability squeeze throughout much of 2016, California’s housing market ended the year on a positive note, posting a moderate sales pace and home price increases in December, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 411,230 units in December, according to information collected by C.A.R. 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 2016 if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The December figure was down 7 percent from the 442,320 level in November, and down 0.6 percent compared with home sales in December 2015 of a revised 413,700. Despite the declines, December’s sales were on par with the two-year average sales pace of 412,000 maintained since 2015. Home sales remained above the 400,000 pace for the ninth straight month. 

For 2016 as a whole, a preliminary 416,250 single-family homes closed escrow in California, up 1.7 percent from 2015’s revised pace of 409,410.

“December’s sales decrease was expected, and was primarily due to unseasonably strong sales last month and December 2015, when new mortgage rules delayed sales that would have closed in November 2015 and pushed closings into December 2015,” said C.A.R. President Geoff McIntosh. “Despite a decline in sales in December, the strong performance in the last quarter of 2016 helped push annual sales above 2015’s pace. The last quarter of 2016, in fact, was the best quarter we’ve had since the fourth quarter of 2012.”

Making sense of the story

  • The statewide median price increased for the first time since August and remained above the $500,000 mark for the ninth consecutive month.
  • The median price of an existing, single-family detached California home rose 1.5 percent from a revised $501,710 in November to reach $509,060 in December.
  • December’s median price increased 3.9 percent from the revised $489,770 recorded in December 2015.
  • California’s housing market experienced sold price growth throughout 2016, with the median price increasing 5.4 percent for the year as a whole to reach $502,250. 

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