C.A.R. Reports Declining Interest Rates Bolster February Home Sales

Existing, single-family home sales totaled 421,670 in February on a seasonally adjusted annualized rate, up 6.6 percent from January and up 5.9 percent from February 2019.
February’s statewide median home price was $579,770, down 0.8 percent from January and up 8.5 percent from February 2019.
The statewide Unsold Inventory Index was 3.6 months in February, up from 3.4 months in January but down from 4.6 months in February 2019.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 421,670 units in February, according to information collected by C.A.R. from more than 90 local REALTOR associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2020 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

February’s sales total was up 6.6 percent from the 395,700 level in January, marking the first time in three months that sales jumped above the 400,000 benchmark. February also marked the eighth consecutive month of year-over-year sales increases.

The median price inched up 0.8 percent from January’s revised $575,160 to $579,770 in February. The median price climbed 8.5 percent from $534,120 in February 2019. February marked the third straight month with a year-over-year gain of more than 7 percent, fueled by low interest rates.

Other key points from C.A.R.’s February 2020 resale housing report include:

At the regional level, non-seasonally adjusted sales rose from last year in all major regions, except the Bay Area. Southern California increased the most with 12.5 percent, followed by Central Coast (7.6 percent) and Central Valley (2.3 percent). Thirty-two of the 51 counties tracked by C.A.R. experienced year-over-year growth, with Siskiyou gaining the most from last year at 100.0 percent. Tehama had the biggest drop, with sales falling 40.5 percent on a year-over-year basis.
Median prices in all regions increased in February from last year, with Central Coast up the most at 10.0 percent, followed by Southern California (8.4 percent), Central Valley (6.3 percent), and the Bay Area (5.0 percent).
Forty-one of the 51 counties tracked by C.A.R. reported a year-over-year gain in price in February, with Plumas gaining the most at 24.4 percent from last year. Of the 10 counties that experienced a price drop from last February, Mariposa had the biggest decline of 11.2 percent.
California housing supply continued to increase in February from the prior month as the market geared up for the spring home-buying season, with the number of active listings inched up by 0.9 percent from January. The month-to-month increase is on par with the average January to February increase of 0.8 percent recorded between 2008 and 2019. On a year-over-year basis, however, active listings continued to drop by more than 25 percent for the third consecutive month. Since September of last year, the number of active listings decreased an average of 21.8 percent from the prior year.
The sizable drop in active listings, together with the increase in sales, continued to put downward pressure on the Unsold Inventory Index (UII), resulting in a drop in the index to 3.6 months, down from 4.6 months a year ago.
With new coronavirus cases continuing to spread across the nation and a declaration of a national emergency, many potential sellers will likely delay putting their homes on the market, which may lead to fewer new listings. On the other hand, if homebuyers postpone their plans to enter the market due to their dimmer financial outlook, a sharp sales decline will result in an increase in unsold inventory in the short term.
The median number of days it took to sell a California single-family home fell significantly from a year ago, declining from 33 days in February 2019 to 23 days in February 2020.
C.A.R.’s statewide sales-price-to-list-price ratio* was 99.1 percent in February 2020, up from 98.0 in February 2019.
The statewide average price per square foot** for an existing single-family home was $283 in February 2020 and $271 in February 2019.
The 30-year, fixed-mortgage interest rate averaged 3.47 percent in February, down from 4.37 percent in February 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.26 percent, compared to 3.87 percent in February 2019.