REAL ESTATE NEWS...New U.S. single-family home sales race to 10-month high

BY LUCIA MUTIKANI

New U.S. single-family home sales surged in December to their highest level in 10 months, the latest indication that the housing sector remains on a firmer footing despite a massive stock market sell-off and slowing economic growth.

The Commerce Department said on Wednesday sales rose 10.8 percent to a seasonally adjusted annual rate of 544,000 units, the highest level since February. Sales last month were likely buoyed by unseasonably mild weather and a rise in the supply of homes on the market, which increased choices for buyers.

"Don't count the economy out yet with the darkening skies seen in January as world stock markets fell on worries over China and crude oil and world growth. Worries don't become reality," said Chris Rupkey, chief economist at MUFG Union Bank in New York.

The Federal Reserve on Wednesday acknowledged that economic growth had slowed late last year. The U.S. central bank kept its benchmark overnight interest rate unchanged and said it was "closely monitoring global economic and financial developments." The Fed in December raised its benchmark overnight interest rate, the first rate hike in nearly a decade.

The dollar was trading lower against a basket of currencies, and prices for U.S. government debt fell. U.S. stocks were down in volatile trade.

New home sales soared 14.5 percent to 501,000 units in 2015, the highest level since 2007. Economists had forecast new home sales, which account for about 9.1 percent of the housing market, edging up to a 500,000 unit-rate last month.

Housing is being supported by tightening labor market conditions, which are spurring a rise in household formation.

The data came on the heels of a report last Friday showing a record increase in home resales in December from a 19-month low in November.

PROMISING SIGN

A separate report from the Mortgage Bankers Association showed applications for home purchase loans increased 8.8 percent last week from a week earlier. Mortgage rates remain low by historical standards, even after the Fed's rate hike.

"This is a promising sign for the housing market as we move into 2016," said Tian Liu, chief economist at Genworth Mortgage Insurance in Raleigh, North Carolina. "We expect the strong increase in new home sales to continue as the fundamentals in the housing market remain strong and newer vintage homes are in short supply."

A firmer housing sector should put a floor under the economy, which has been battered by the headwinds of a strong dollar, spending cuts by energy firms stung by lower oil prices and sluggish global demand. Efforts by businesses to whittle down an inventory bloat have also been a drag on growth.

This month's stock market sell-off, which has seen a more than 7 percent plunge in the Standard & Poor's 500 index, is also adding to the pain. But with housing boosting household wealth, the drag on consumer spending from falling stock market values could be minimal.

The government is expected to report on Friday that fourth-quarter gross domestic product increased at a 0.8 percent annual rate, according to a Reuters survey of economists, slowing sharply from the third quarter's 2 percent rate.

In December, new home sales jumped 20.8 percent in the Northeast and gained 0.4 percent in the populous South. They advanced 31.6 percent in the Midwest and shot up 21.0 percent in the West.

The inventory of new homes on the market rose 2.6 percent to a six-year high of 237,000 units last month. At December's sales pace it would take 5.2 months to clear the supply of houses on the market, down from 5.6 months in November.

The median price of a new home fell 4.3 percent from a year ago to $288,900.

REAL ESTATE NEWS...It’s Official: 2015 Was a Banner Year in Housing, but What’s Next?

By Jonathan Smoke

With the latest numbers on existing- and new-home sales from the National Association of Realtors®, we can now close the books on 2015. And quite a year it’s been! As we’d expected, 2015 produced major growth and some big-time milestones in housing’s recovery.

How good was it? Total home sales grew 7% over 2014 for the best year since 2007, based on 6% growth in existing-home sales and 15% growth in new-home sales. The increase in 2015 was a stark contrast to the decline in total sales in 2014.

And en route to housing’s definitive recovery in 2015, we hit plenty of landmarks—including a new nominal record for the median price of existing homes in June, a substantial decline in distressed sales, an uptick in the share of first-time buyers, and an increase in the share of new homes among total sales.

What drove the market last year

We estimate from monthly sales and survey data from NAR that sales to first-time buyers were up 12%. An improving economy, pent-up demand, and strong affordability brought more millennials and other first-time buyers into the market.

Sales to buyers relocating or resulting from a job change were up 8% as the country saw close to 2.8 million jobs created and the unemployment rate fell to 5%.

Demographics were a driving force behind strong demand for housing in 2015 as we returned to a more normal pace of household formation related to the healthy job market.

The new-home market grew in part because of builders responding to stronger and more consistent demand from entry-level buyers. As a result of product starting to shift, the median price of a new home ended the year at $288,900, down 4.5% from last year.

Not everything was about rainbows and green pastures, however. Distressed sales were down 19% as a result of fewer foreclosures and short sales. Sales to investors were down 10% as fewer distressed sales provided fewer bargains. Even sales to international buyers were down 12% due to weak economic conditions abroad, combined with a much stronger dollar.

What lies ahead

We are expecting growth again in 2016, but it will be more moderate for existing-home sales—and just a bit stronger for new-home sales. The demographics that fueled all that growth in 2015 should be just as strong in 2016. More employment growth should lead to similar household formation, and affordability will still favor buying over renting for those who are qualified and ready to settle down.

The year ahead should also see further gains in first-time buyers and more sales and purchases by retirees who are seeing their opportunity to capture the price appreciation they have enjoyed since 2011 and move to a home better suited for their retirement.

January is off to a good start for our growth forecast materializing in 2016. Despite the nauseating declines and turbulence in the financial markets, consumer confidence stayed firm and even increased in January. Likewise, we have seen a surge in visitors, searches, and listing views on realtor.com®, just as you would expect after the doldrums of the holidays.

It appears that consumers looking to buy in 2016 are heeding our advice and getting started in their home search. And ironically, those weak financial markets just gave them an early housewarming gift: Mortgage rates are lower now than when the year began.

The two biggest factors that held the market back in 2015 are also the primary problems now: tight supply and tight credit. Supply should improve somewhat in 2016 as new construction grows and as more existing homeowners such as retirees decide that it is the perfect year to sell and buy.

The tight credit situation is not likely to improve dramatically in 2016, so one of the best moves potential buyers can make is to work on increasing their credit score. Start now.

REAL ESTATE TOPICS..Few US Neighborhoods Affordable, Walkable With Good Schools.

By JOSH BOAK, AP ECONOMICS WRITER

Few neighborhoods can match the perks of Adams Morgan in Washington, D.C. — a reality that reflects a broader problem for the U.S. housing market.

Residents of Adams Morgan enjoy a bevy of bars, restaurants, exercise studios and shopping, just steps from their row houses and condo buildings. Home values are reasonable relative to neighborhood incomes. And in general, the area schools rate as better than average nationally.

Across the country, just 14 percent of neighborhoods manage to be at once affordably priced, walkable and near decent schools. And many of those neighborhoods exist in only two cities: Washington and Seattle, according to a new analysis released Wednesday by the real estate brokerage Redfin.

The findings suggest a substantial mismatch between the neighborhoods where people say they want to live and the homes actually available to them.

"Cities have not kept up with consumer tastes," said Nela Richardson, Redfin's chief economist.

The analysis examined 170 neighborhoods in 20 cities, comparing home sales and income data with rankings from the organizations Walk Score and GreatSchools. Some cities, such as Baltimore, Boston and Philadelphia, contained balanced neighborhoods — where people of different income classes could afford to live — but their schools performed poorly.

Others, such as Phoenix, San Antonio and Columbus, Ohio, enjoy above-average neighborhood schools. But their communities pretty much require cars for doing basic errands.

Homebuyers have long sought high-quality schools. But a rising emphasis on walkability reflects a generational shift. Compared with older generations, millennials, ages 18 to 34, disproportionately prefer walking, according to a survey released in July by the National Association of Realtors and the Transportation Research and Education Center at Portland State University.

Nearly a third of millennials commute to work or school by foot, compared with 13 percent for the post-World War II baby boom generation.

In the Redfin report, only 24 neighborhoods in eight cities met all three criteria of walkability, affordability and schools. Seven of the neighborhoods were in Seattle. Its University District neighborhood — site of the University of Washington's campus — ranked as the highest.

Though housing in the University District is expensive — the median home value is near $620,000, roughly triple the national level — high area incomes tend to make it relatively affordable. More than 57 percent of families earned more than $100,000 in 2014, according to the Census Bureau.

Three of the top neighborhoods were in Washington, D.C. Adams Morgan — ranked third by Redfin — is packed with bars along its 18th Street corridor. Yet its residents are also relatively well-paid, with 61 percent of families making at least $100,000. Among the new condo buildings is Ontario 17, which has sold over 70 percent of its units since its pre-construction sales began a year ago. Its ground floor features a Pilates-style studio.

"A lot of the homeowners who did purchase already lived in Adams Morgan," said Brenda Moreno, the broker managing condo sales for the building. "People want to be very close to work."

But the increased popularity of walkable neighborhoods could mean that many will eventually lose their affordability. The Redfin analysis shows that few walkable communities also have access to better-than-average public and charter schools — meaning that their home values might rise and cause affordability to drop.

A separate measure by the real estate data firm Zillow shows that prices in Seattle's University District have shot up nearly 17 percent in the past 12 months, a sign that walkable neighborhoods may soon price out its least prosperous residents.

"These balanced neighborhoods are an endangered species right now," said Richardson, Redfin's chief economist.

REAL ESTATE TOPICS...It’s a seller’s market but are homes still affordable?

By Melody Hahm

U.S. home prices saw a 5.8% year-over-year increase in November, according to Tuesday’s S&P/Case-Shiller 20-city composite.

“The housing market continues to see a strong recovery. Recovery is stronger than the historical trend, and a lot of that is driven by strong job growth numbers.” says Stan Humphries, chief economist and head of analytics at Zillow Group. In August 2013 the same 20-city composite posted a 12.1% increase year-over-year. Despite this report’s robust numbers, current figures are a far from those highs.

“Home prices were really appreciating too quickly back then and that’s bad for the housing market because it risks reinflating another housing bubble. So we’re happy to see lower gains, but they’re still very robust -- you have to compare that to the historical average where home prices rise about 2% to 4% a year,” says Humphries.

We may be in a seller’s market but would not want to have one at the buyer’s expense. Humphries notes that there’s a common misbelief that home prices should appreciate to their maximum. In reality, however, this only benefits owners and can lock out buyers from the housing market entirely.

The more holistic S&P/Case-Shiller Home Price Index, which covers the entire country, rose 5.3% in the 12 months ended November, compared with October’s increase of 5.1%.

Currently, buyers are spending about 15% of their monthly income on their mortgage payments, which is much lower than the historical average of 21.3%, according to Zillow.

Still, housing affordability remains uneven across the U.S. Inevitably, hot markets like New York City continue to appreciate in price and inhibit buyers from purchasing property.

Specifically citing California’s Bay Area, Los Angeles and San Diego as regions where homebuyers are paying on par with historical levels, if not more, Humphries noted big discrepancies in home affordability.

Additionally, renters are reluctant to make the commitment to buy. Only 32% of all purchasers in 2015 were first-time homebuyers, which marks the third straight yearly decline and the lowest percentage since 1987.

As millennials put off marriage and having kids, they have less need to buy a home. They’re now starting to “move into home buying in earnest, but a lot of them are still renting,” says Humphries.

And despite sticker shock-inducing rentals, the rise in prices is expected to slow. Zillow forecasts a 1.1% annual increase in rents by the end of 2016, which would be sharply down from 4.5% at the end of 2015. One reason for that, Humphries says, is more inventory coming onto market.

Ultimately, as more renters put buying on the backburner, the first-time homebuyer market will continue to shrivel. “This does have implications for the purchase side because high rents make it harder for you to save for a down payment, and eventually transition to homeownership,” says Humphries.

REAL ESTATE NEWS...Home Prices in 20 U.S. Cities Climb by Most Since July 2014

BY Sho Chandra

Home prices in 20 U.S. cities rose at a faster pace in the year ended November, underscoring the shortage of supply amid steady demand.

The S&P/Case-Shiller index of property values in 20 cities increased 5.8 percent from a year earlier, the biggest advance since July 2014, a report from the group showed Tuesday in New York. The median projection of 31 economists surveyed by Bloomberg called for a 5.7 percent gain. Nationally, prices rose 5.3 percent year-over-year.

Low inventories are boosting property values, helping support household wealth for homeowners and offsetting some of the damage from the drop in stock prices. While mortgage rates are expected to stay low, faster wage growth is needed to bring homes within reach of more Americans, underpinning the industry’s recovery this year.

“There’s a positive underlying picture in the trend in home prices,” said David Sloan, a senior economist at 4Cast Inc. in New York, who correctly projected the gain. “As long as demand is strong, the price appreciation will persist. We expect it to continue this year.”

Economists’ estimates in the Bloomberg survey ranged from gains of 4.9 percent to 6 percent. The October reading showed a year-over-year advance of 5.5 percent.

Another report from the Federal Housing Finance Agency showed prices increased 0.5 percent in November from the previous month on a seasonally adjusted basis. The gauge measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide specific prices. 

Three-Month Average

The S&P/Case-Shiller index is based on a three-month average, which means the November figure was also influenced by transactions in October and September.

All 20 cities in the index showed a year-over-year gain, led by an 11.1 percent increase in Portland, Oregon. Chicago had the smallest increase at 2 percent. Gains in November accelerated in 14 cities from the prior month, with indexes for Dallas, Denver and Portland. Oregon, reaching record highs.

The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Borrowing Costs

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” David Blitzer, chairman of the S&P index committee, said in a statement. “The consumer portion of the economy is doing well.”

On a monthly basis, home prices in the 20-city index adjusted for seasonal variations climbed 0.9 percent. The Bloomberg survey median called for a 0.8 percent increase.

The month-over-month gain was led by Charlotte, North Carolina, followed by Detroit.

Unadjusted prices in the 20-city gauge rose 0.1 percent from the previous month.

By lowering household wealth, the slump in stock prices will subtract about 0.3 to 0.4 percentage point from consumer spending this year, according to a research note e-mailed today by economists at Goldman Sachs Group Inc. in New York. They projected increasing home prices will make up for some of the decline, limiting the overall reduction in consumption to 0.2 percent.

End of 2015

Recent reports on residential real estate have been mixed, indicating the industry was cooling toward the end of 2015.

Purchases of previously owned properties rose more than projected in December to wrap up the best year since 2006, according to the National Association of Realtors. Prices climbed as the supply of houses on the market was the smallest of any December since 1999.

Meanwhile, homebuilders unexpectedly pulled back on new construction, which led to a drop in housing starts last month. At the same time, 2015 was still the strongest year for starts since 2007.

REAL ESTATE TOPICS...Why buy?

REAL ESTATE TOPICS...7 Strategies To Avoid Overpaying For A House

By Laura Agadoni|

Whether they’re buying designer jeans or a new house, no one wants to suffer from buyer’s remorse.

There are lots of potential complications that can cause you to overpay for a house, from being caught up in open-house frenzy to skipping a home inspection to “save” yourself money. But just as there are obstacles to getting the best deal, there are also tried-and-true strategies to get a fair price for a home, like getting a private showing of that home for sale in Philadelphia, PA, instead of (or in addition to) attending the open house.

Here are seven more tips to calculate accurate house value and avoid overpaying for your home.

1. Define “fair price”

Before we get into the nitty-gritty of landing the best deal, it’s fair to point out that sometimes it’s worth paying a bit more if that means you can score a house that perfectly suits your needs. Ask yourself: Is it really worth losing your dream home over a few thousand dollars? It’s a call only you can make, but the answer just might be no.

2. Know the comps

One of the best ways to know the value of a home is to find out what similar homes in the area recently sold for, known as “comps,” or “comparable sales.” Looking at what other homes in the neighborhood are listed for helps too. But you usually get the most accurate picture of local home values by looking at the price someone actually paid. “Ideally, you’ll be able to find at least three comparable properties that have sold recently in the same neighborhood,” says Sam Heskel, CEO of Nadlan Valuation, a New York, NY, appraisal company. A real estate agent should be able to track down this information for you.

3. Include an appraisal contingency

Typically, when you buy a house, you put in an offer, and if the seller accepts it, your lender orders an appraisal. But if the appraisal comes in lower than the price you agreed to pay, you’ll have some decisions to make. And you’ll have more options if you’ve included an appraisal contingency in your contract. “An appraisal contingency typically stipulates that the appraisal must come in at 5% or 10% of the sale price, or sometimes even at or above the sale price,” says Heskel. “If the bank’s appraiser says you’re overpaying by $20,000, why should you pay that price?” You can try to negotiate with the seller to meet you in the middle, but as long as you can afford to come up with the difference — because your lender probably won’t agree to lend more than a home is worth — it’s your call to determine whether you’re overpaying for the property.

4. Be your own investigative journalist

When you’re house-hunting, Google can be your best friend. Why? Because you want to know before you buy whether something’s going on in the neighborhood that could affect property values. Maybe a high-density development is coming, or an increase in homeowners’ association or condo fees is on the horizon. “Buyers should do their own legwork to talk to city hall, the police department, the tax department, schools, neighbors, neighborhood groups, etc.,” says Stacey Alcorn, CEO of LAER Realty Partners in Massachusetts.

5. Work with a buyer’s agent

Yes, you can browse listings on Trulia, but don’t let that keep you from hiring a real estate agent. A good agent will know of properties that are about to hit the market (or might sell before the MLS listing goes live!) plus have expansive knowledge of your market, which can be a huge help if they suggest neighborhoods you haven’t considered that are a great fit for your needs.

“In today’s market with tight inventory, almost half of my deals are completed and sold off-market before they even hit the open market,” says Ryan Pertile, a Minneapolis, MN, agent. “So homebuyers need to find and hire a real estate expert in their desired neighborhood.”

Besides providing you with a comparative market analysis, an in-depth look at house values, a rock star agent “knows the current condition of the market and what is a fair price,” says Phillia Kim Downs, a New York, NY, agent. “Based on the length of time the property has been on the market, whether it’s a buyer’s or seller’s market, and whether there’s a bidding war, an agent should be able to guide you effectively with strategy to make sure you get the most bang for your buck.”

6. Comparison-shop for your mortgage

You probably comparison-shop before buying furniture or even gas for your car. But almost half of consumers don’t shop around for their mortgage, according to the Consumer Financial Protection Bureau. And that’s a mistake. Lenders charge different fees, and they offer various interest rates, sometimes varying by half a percent or more. That could affect your payment to the tune of $60 a month.

7. Don’t get sucked into a bidding war

If you know you’re in a seller’s market (little supply with lots of demand), making an offer that’s below the asking price probably won’t get you the house — and it might put you in a bidding war situation. Typically, it’s better to be preapproved with a mortgage loan and make a strong offer right off the bat. Entering a bidding war can become emotional. “If you really, really want the property, your logical, rational perceptions can get influenced,” says Downs. Know your limit, and walk away if the price goes higher. There are always other homes that come on the market.

How do you make sure not to pay too much for a home? Let us know in the comments!

REAL ESTATE TIPS...6 Proven Ways Consumers Find Their Agents

6 Proven Ways Consumers Find 

Their Agents:

Are You Being Found?

If you could predict the method by which home buyers and sellers found you, would you make more of an effort to be available and prominent on those channels? We know how they’re finding you … you don’t have to guess.

Every year, the National Association of REALTORS® releases the Profile of Home Buyers and Sellers report, which includes a wealth of information regarding where and how consumers find their agents. Recently released, this year’s report unveils six undeniable ways that consumers find their agents – and the information gives agents and brokers the perfect roadmap for success. Here’s what you can learn:

When you boil it down, consumers choose their agents thanks to two main agent efforts: marketing and relationship skills. Within both of these categories, there are some big winners.

Top Relationship Efforts

Relationships are the core of many businesses, particularly real estate. Friends and relatives, past clients and other brokers are leading the pack here. What the NAR study tells us is that good follow-up and relationship building does not go out of style, but it is moving towards mobile – quickly. This requires some creativity to keep it authentic, personal and timely.

#4: Friends/Relatives (66%):

It’s no secret that friends and relatives are a driving force behind many agents’ businesses. Keeping an open line of communication is of great importance, as it’s natural to build new relationships from referrals simply by staying in touch and letting your family and friends know you’re still in real estate.

#5: Past Clients (20%):

Past clients’ ability to speak first-hand regarding the experience they had with you is a key component of your reputation, and your ability to earn repeat and referral business. We know that you’re busy and that keeping in touch can feel overwhelming at times. As such, we’ve been carefully streamlining Top Producer® so that it’s not a big chore to connect with just five people per day. It’s especially easy to do on mobile!

#6: Other Broker (8%):

While referrals from other brokers make up just a small portion of the pie, we would be remiss not to mention the importance of staying connected with other industry professionals and mastering your online presence so when they search for you online, what they find matches your personal brand and professionalism.

Top Marketing Efforts

Within the marketing realm, your online web presence, open houses and signage are the three strongest players. It’s likely that consumers are starting their searches online and then driving by the property or canvassing their neighborhoods of interest to glean additional information.

This suggests you should shift your marketing online – if you haven’t already done so - and also make sure you are really available on mobile, since searches go directly from online to the streets. Here are a few tips to amp up your marketing efforts in these areas:

#1: Web Presence (50%):

An easy place to start when trying to boost your web presence is to complete your free realtor.com® profile. With our newly released profiles you can add recommendations and reviews to further increase your online authority and relevance in your local market. What’s more, a Digital Ad Package can place your brand directly in the online search path of today’s consumers - consider it your online yard sign.

#2: Open Houses (23%):

We know, not all agents love hosting open houses. Yet, if you’re able to provide the consumer with something of value and follow-up quickly, you are more likely to convert them into a viable lead. To make your life a bit easier, check out Market Snapshot®. It allows you to give prospective clients the accurate, real-time data they require to make knowledgeable buying decisions.

#3: Signage (23%):

With these kinds of numbers, it’s important to pay keen attention to sign calls – particularly your ability to follow-up immediately and personally – so that those driving by don’t move on to another agent looking for timely and relevant information. Tools like FiveStreet can help you instantly respond to these calls, even when you’re busy with other clients

REAL ESTATE NEWS...US existing-home sales jump in December

Washington (AFP) - Sales of US existing homes rebounded sharply in December from a November slump, scoring the biggest one-month gain on record, the National Association of Realtors said Friday.

Existing-home sales jumped 14.7 percent to an annual rate of 5.46 million units in December from 4.76 million in November.

December sales were up 7.7 percent from a year ago.

The rebound came after November sales slumped to the slowest pace in 19 months, due in part to new mortgage disclosure rules that delayed closing times on contracts, the NAR said.

"While the carryover of November's delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015," said Lawrence Yun, NAR chief economist, in a statement.

For all of 2015, sales of single-family homes, condominiums and other types of housing reached 5.26 million units, the strongest performance since 2006 when 6.48 million units were sold.

All four major regions had large gains in December, led by the South and West.

"The prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year," Yun added.

Sales of single-family home, the largest sector in the market, jumped 16.1 percent in December to 4.82 million units.

The median price for all housing types rose year-over-year for the 46th straight month, to $224,100, a gain of 7.6 percent from a year ago.

Inventory on the market tightened further. At the end of December, there were 1.79 million existing homes for sale, down 12.3 percent from November and 3.8 percent from a year ago.

"Although some growth is expected, the housing market will struggle in 2016 to replicate last year's seven percent increase in sales," Yun said.

"In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas."

REAL ESTATE TOPICS...California December home sales and price report

For release:
January 15, 2016

California home sales bounce back in December after temporary setback in November

- Existing, single-family home sales totaled 405,530 in December on a seasonally adjusted annualized rate, up 9.6 percent from November and up 10.7 percent from December 2014.

- December’s statewide median home price was $489,310, up 2.6 percent from November and up 8.0 percent from December 2014.

- Sales of condos and townhomes were up 25.1 percent from November and were 10.2 percent higher than a year ago.

LOS ANGELES (Jan. 15) – California existing home sales rebounded in December after new loan disclosure rules delayed closings in November, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Home sales exceeded the 400,000-unit level in December after falling short in November. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 405,530 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 2015 if sales maintained the December pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

For 2015 as a whole, a preliminary figure of 407,060 single-family homes closed escrow in California, up 6.4 percent from a revised 382,720 in 2014.

The December figure was up 9.6 percent from the revised 370,070 level in November and up 10.7 percent compared with home sales in December 2014 of a revised 366,460. The month-to-month increase in sales was the largest since January 2011, and the year-to-year increase was the largest since July 2015.

“As we speculated, sales that were delayed in November because of The Consumer Financial Protection Bureau’s new loan disclosure rules closed in December instead, which led to the greatest monthly sales increase in nearly five years,” said C.A.R. President Ziggy Zicarelli. “Sales increased across the board in all price segments in December, but improvement in the sub-$500,000 market was more pronounced as many homes affected by the new loan disclosures were priced under the conforming loan limit.”

The median price of an existing, single-family detached California home rose 2.6 percent in December to $489,310 from $477,060 in November. December’s median price was 8.0 percent higher than the revised $453,270 recorded in December 2014. 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 year-to-year price gain was the largest since August 2014.

“In line with our forecast, California’s housing market experienced strong sales and price growth throughout last year, with the median price increasing 6.2 percent for the year as a whole to reach $474,420 in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Looking forward, we expect the foundation for the housing market to remain strong throughout the year, with moderate increases in home sales and prices, but headwinds of tight housing supply and low affordability will remain a challenge.”

Other key points from C.A.R.’s December 2015 resale housing report include:

• While more sales closed in December, the number of active listings continued to drop from both the previous month and year. Active listings at the statewide level dropped 11.7 percent from November and decreased 7.9 percent from December 2014. At the regional level, total active listings continued to decline from the previous year in Southern California, Central Valley, and the San Francisco Bay Area, dropping 9.6 percent, 7.6 percent, and 5.2 percent, respectively.

• The sharp increase in sales in December and fewer listings combined to tighten the available supply of homes on the market. C.A.R.’s Unsold Inventory Index fell to 2.8 months in December from 4.2 months in November. The index stood at 3.2 months in December 2014. 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 increased in December to 39.5 days, compared with 37.5 days in November and 44.1 days in December 2014.

• According to C.A.R.’s newest housing market indicator, which measures the sales-to-list price ratio*, properties are generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices.  The statewide measure suggests that homes sold at a median of 97.9 percent of the list price in December, up from 97.2 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 100.7 percent in December, up from 100 percent a year ago.

• The average price per square foot** for an existing, single-family home was $230 in December 2015, up from $222 in December 2014. 

• San Francisco continued to have the highest price per square foot in December at $749/sq. ft., followed by San Mateo ($715/sq. ft.), and Santa Clara ($568/sq. ft.).  The three counties with the lowest price per square foot in December were Siskiyou ($107/sq. ft.), Tulare ($123/sq. ft.), and Merced ($124/sq. ft.).

• Mortgage rates inched up in December, with the 30-year, fixed-mortgage interest rate averaging 3.96 percent, up from 3.94 percent in November and up from 3.86 percent in December 2014, according to Freddie Mac.  Adjustable-mortgage interest rates also edged up, averaging 2.66 percent in December, up from 2.63 percent in November and up from 2.40 percent in December 2014.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only.  County sales data are not adjusted to account for seasonal factors that can influence home sales.  Movements in sales prices should not be interpreted as changes in the cost of a standard home.  The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold.  The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions.  The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage.  A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
   
**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property.  It is calculated as the sale price of the home divided by the number of finished square feet.  C.A.R. currently tracks price-per-square foot statistics for 38 counties. 

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
# # #

December 2015 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

December-15	Median Sold Price of Existing Single-Family Homes							Sales
State/Region/County	Dec-15	Nov-15		Dec-14		MTM% Chg	YTY% Chg	MTM% Chg	YTY% Chg
CA SFH (SAAR)	$489,310	$477,060	r	$453,270	r	2.6%	8.0%	9.6%	10.7%
CA Condo/Townhomes	$394,110	$396,740	r	$364,310	r	-0.7%	8.2%	25.1%	10.2%
Los Angeles Metropolitan Area	$446,660	$439,730		$413,150		1.6%	8.1%	33.3%	8.3%
Inland Empire	$300,130	$293,220		$281,660		2.4%	6.6%	29.0%	6.7%
S.F. Bay Area	$728,950	$744,750	r	$660,200	r	-2.1%	10.4%	18.0%	13.5%
S.F. Bay Area
Alameda	$738,790	$736,870		$645,680	r	0.3%	14.4%	19.3%	8.0%
Contra-Costa	$507,180	$570,440	r	$483,330	r	-11.1%	4.9%	21.1%	8.6%
Marin	$1,120,690	$1,180,000		$990,130		-5.0%	13.2%	6.6%	25.6%
Napa	$628,120	$678,570		$516,670		-7.4%	21.6%	1.0%	23.2%
San Francisco	$1,215,620	$1,323,860		$1,058,820	r	-8.2%	14.8%	10.1%	2.6%
San Mateo	$1,194,000	$1,195,000		$980,000		-0.1%	21.8%	9.5%	13.1%
Santa Clara	$920,000	$965,000		$846,500		-4.7%	8.7%	24.3%	22.7%
Solano	$356,640	$355,510		$324,070		0.3%	10.1%	29.8%	27.9%
Sonoma	$563,320	$541,380		$519,470		4.1%	8.4%	7.0%	4.4%
Southern California
Los Angeles	$502,750	$457,870		$464,650		9.8%	8.2%	39.9%	10.4%
Orange	$710,940	$711,030		$683,490		0.0%	4.0%	26.0%	6.0%
Riverside	$348,020	$337,200		$322,020		3.2%	8.1%	30.8%	2.4%
San Bernardino	$234,080	$236,220		$216,020		-0.9%	8.4%	26.3%	14.2%
San Diego	$548,080	$554,440		$494,500		-1.1%	10.8%	33.1%	9.1%
Ventura	$601,910	$623,400		$569,600		-3.4%	5.7%	34.4%	9.9%
Central Coast
Monterey	$517,500	$512,500		$430,000		1.0%	20.3%	1.0%	4.7%
San Luis Obispo	$548,440	$536,970		$488,130		2.1%	12.4%	28.4%	17.8%
Santa Barbara	$555,000	$634,610		$655,000		-12.5%	-15.3%	26.4%	16.1%
Santa Cruz	$703,940	$703,750		$698,500		0.0%	0.8%	23.8%	9.9%
Central Valley
Fresno	$223,370	$222,970		$204,430		0.2%	9.3%	36.9%	12.7%
Glenn	$180,000	$186,670		$176,670		-3.6%	1.9%	-22.2%	-6.7%
Kern (Bakersfield)	$215,000	$217,000	r	$211,250	r	-0.9%	1.8%	20.3%	3.0%
Kings	$202,000	$181,250		$195,550		11.4%	3.3%	44.6%	30.6%
Madera	$223,330	$229,540		$212,500		-2.7%	5.1%	-21.3%	-21.3%
Merced	$208,930	$215,000		$178,230		-2.8%	17.2%	35.4%	8.1%
Placer	$391,960	$398,460		$387,500		-1.6%	1.2%	25.3%	2.6%
Sacramento	$297,600	$292,100		$269,350		1.9%	10.5%	30.1%	20.1%
San Benito	$452,500	$512,500		$435,000		-11.7%	4.0%	31.3%	-14.3%
San Joaquin	$287,250	$292,190		$267,070		-1.7%	7.6%	51.0%	20.6%
Stanislaus	$249,440	$249,710		$228,160		-0.1%	9.3%	44.6%	28.1%
Tulare	$196,210	$175,000		$178,620		12.1%	9.8%	65.9%	17.6%
Other Counties in California
Amador	$275,000	$280,000		$229,540		-1.8%	19.8%	42.9%	2.6%
Butte	$261,670	$238,540		$231,820		9.7%	12.9%	16.5%	19.1%
Calaveras	$272,060	$243,750		$243,750	r	11.6%	11.6%	8.0%	21.8%
Del Norte	$194,000	$258,330		$155,000	r	-24.9%	25.2%	61.5%	40.0%
El Dorado	$409,800	$392,680		$385,230		4.4%	6.4%	22.4%	4.8%
Humboldt	$289,580	$264,710		$263,000		9.4%	10.1%	41.5%	14.9%
Lake	$217,650	$256,670		$162,860		-15.2%	33.6%	9.1%	71.4%
Mariposa	$233,330	$283,330		$245,000		-17.6%	-4.8%	0.0%	-33.3%
Mendocino	$352,500	$360,000		$270,830		-2.1%	30.2%	45.2%	17.3%
Nevada	$355,360	$346,000		$314,290	r	2.7%	13.1%	13.5%	5.2%
Plumas	$283,330	$232,140		$233,330	r	22.1%	21.4%	-35.5%	-28.6%
Shasta	$235,000	$230,300		$208,160		2.0%	12.9%	44.2%	7.1%
Siskiyou	$140,000	$165,000		$135,000		-15.2%	3.7%	-13.5%	-23.8%
Sutter	$241,070	$256,670		$200,000		-6.1%	20.5%	1.7%	-7.6%
Tehama	$186,000	$155,000		$205,000	r	20.0%	-9.3%	58.1%	48.5%
Tuolumne	$236,760	$238,460		$211,670		-0.7%	11.9%	21.0%	2.7%
Yolo	$361,220	$402,170		$344,590		-10.2%	4.8%	35.8%	28.7%
Yuba	$226,560	$204,690		$207,140		10.7%	9.4%	23.7%	25.9%

r = revised

December 2015 County Unsold Inventory and Time on Market(Regional and condo sales data not seasonally adjusted)

December-15	Unsold Inventory Index					Median Time on Market
State/Region/County	Dec-15	Nov-15		Dec-14		Dec-15	Nov-15		Dec-14
CA SFH (SAAR)	2.8	4.2		3.2		39.5	37.5	r	44.1	r
CA Condo/Townhomes	2.3	3.4		2.7		37.2	34.0		44.0	r
Los Angeles Metro Area	3.3	4.9		3.8		54.6	53.4		56.4
Inland Empire	4.1	5.7		4.6		57.3	56.1		58.1
S.F. Bay Area	1.4	2.1	r	1.4		25.9	24.6		27.4
S.F. Bay Area
Alameda	1.1	2.0		1.2		20.2	19.2		22.2
Contra-Costa	1.5	1.3	r	0.8	r	22.9	22.4	r	25.1	r
Marin	1.4	2.5		2.2		40.8	40.1		51.7
Napa	3.2	4.3		4.2		55.4	63.9		63.6
San Francisco	0.9	1.8		1.1	r	27.2	22.5		32.3
San Mateo	1.1	1.9		1.1		20.9	19.8		20.6
Santa Clara	1.0	2.0		1.3		23.2	21.9		22.6
Solano	2.1	3.3		2.8		44.8	45.9		54.6
Sonoma	2.1	3.0		2.0		55.0	50.4		56.2
Southern California
Los Angeles	2.8	4.4		3.4		48.5	47.3		50.9
Orange	2.8	4.3		3.1		66.0	61.4		67.7
Riverside	4.4	6.2		4.7		61.0	56.5		61.0
San Bernardino	3.5	5.0		4.4		51.9	55.5		54.4
San Diego	2.7	4.3		3.4		25.6	25.4		28.2
Ventura	3.0	5.0		3.3		61.1	59.5		66.9
Central Coast
Monterey	3.7	4.2		4.0		44.3	28.3		48.6
San Luis Obispo	3.3	4.8		3.9		42.3	36.1		55.9
Santa Barbara	3.8	5.5		4.0		54.1	49.5		53.1
Santa Cruz	1.8	3.2		2.4		32.0	37.0		42.3
Central Valley
Fresno	3.9	5.9		4.1		33.1	28.2		34.9
Glenn	4.7	4.0		4.5		31.0	70.7		55.2
Kern (Bakersfield)	3.6	4.7	r	3.3	r	37.0	40.0	r	35.0	r
Kings	2.6	4.0		3.7		27.7	33.9		42.6
Madera	7.8	6.8		5.4		56.8	78.1		74.3
Merced	3.5	5.5		3.8		38.6	52.8		44.8
Placer	2.1	3.5		2.4		28.9	28.6		36.2
Sacramento	1.7	2.8		2.6		24.8	23.0		28.1
San Benito	3.3	4.1		2.5		28.7	40.7		41.0
San Joaquin	2.3	4.1		3.1		26.2	24.8		29.8
Stanislaus	2.4	4.0		3.2		27.4	26.0		27.7
Tulare	3.3	6.2		3.7		37.8	38.8		43.3
Other Counties in California
Amador	4.4	7.5		4.7		56.4	61.0		75.5
Butte	2.9	4.2		3.6		42.0	36.2		48.4
Calaveras	4.4	5.3		6.0	r	74.1	87.4		77.1	r
Del Norte	6.1	11.5		9.5	r	122.3	126.4		115.2	r
El Dorado	3.6	5.3		3.9		55.0	53.8		54.3
Humboldt	2.9	4.8		4.6		39.5	54.2		71.0
Lake	3.4	4.6		5.9		95.1	116.8		91.0
Mariposa	9.3	10.4		6.5		125.8	105.5		125.8
Mendocino	4.6	7.9		5.4		77.3	68.3		72.6
Nevada	3.7	5.1		6.8		46.4	47.2		36.8
Plumas	10.4	8.4		8.3	r	130.7	125.8		128.6	r
Shasta	4.6	7.6		4.6		50.2	55.7		52.3
Siskiyou	7.0	7.9		7.1		75.5	79.1		107.3
Sutter	3.3	3.8		3.5		41.0	38.9		44.2
Tehama	3.1	6.4		5.5	r	53.2	53.8		69.7	r
Tuolumne	4.2	6.1		4.3		82.8	43.9		91.0
Yolo	1.9	3.1		2.5		25.1	24.9		34.2
Yuba	2.6	4.2		3.6		28.1	25.4		42.2

r = revised