Sales of single-family resale homes dropped 22.7 percent in July 2007 compared to the sales pace for that month last year, and liquidity problems in the mortgage market will likely continue to pull down sales, the California Association of Realtors trade group reported today.
Also, the inventory of for-sale existing homes in the state reached 10.7 months in July, compared with 7.3 months for that month last year. The association’s Unsold Inventory Index rating for July indicates that it would take about 11 months to sell the July inventory of for-sale homes, given that month’s sales pace.
A supply greater than six months is generally said to indicate a buyer’s market or a market with more supply than demand, with a supply below six months indicating a seller’s market or a market with more demand than supply.
The association reported a seasonally adjusted annual rate of 350,980 closed escrow sales of existing, single-family detached homes in the state in July, compared with a rate of 453,980 in July 2006. This rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.
The median sales price of existing single-family detached homes in the state was $586,030 in July, up 3.2 percent compared with $567,860 in July 2006, according to the report.
“With credit drying up in recent weeks, we expect further weakness in sales over the next few months,” said Leslie Appleton-Young, chief economist for the association, in a statement.
“It is too early to say how long the current credit crunch will continue, but we are hopeful that we will avoid a prolonged credit crisis that might cause sales to decline over a longer period of time.” Appleton-Young also said in her statement that the association does not believe that the decline in sales is “driven by weakening economic conditions.”
Thirty-year fixed mortgage interest rates averaged 6.7 percent during July 2007, the association reported, compared with 6.76 percent in July 2006, according to Freddie Mac. And adjustable mortgage interest rates averaged 5.71 percent in July 2007 compared with 5.79 percent in July 2006.
The median number of days it took to sell a single-family home was 51.8 days in July 2007, compared with 47.7 days for the same period last year.
In a separate report covering local statistics generated by the association and data provider DataQuick Information Systems, about 29.6 percent, or 110 out of 371 cities and communities, had an increase in median home prices from a year ago.
The DataQuick report includes statistics for all types of home sales, including new and existing, condos and single-family homes.
According to this report, the five cities and communities with the highest median home prices in California in July 2007 were: Los Altos, $1.78 million; Manhattan Beach, $1.63 million; Burlingame, $1.5 million; Newport Beach, $1.45 million; and Saratoga, $1.41 million.
The five cities and communities with the greatest median home-price increases in July 2007 compared with the same period a year ago were: Novato, at 19 percent; Culver City, at 18 percent; Ridgecrest, at 14.2 percent; Glendale, at 12.4 percent; and Manhattan Beach, at 11.7 percent.
The five cities and communities with the highest drop in prices year-over-year in July 2007 were: Emeryville, down 24.5 percent; Yucca Valley, down 22.1 percent; Merced and Carmichael, down 21.4 percent; and Oakley, down 20.8 percent.
San Joaquin, San Benito and Stanislaus counties all had year-over-year price drops ranging from 13.3 to 13.9 percent.
The five cities and communities with the lowest median home prices in July 2007 include: Taft, $141,500; Barstow, $182,250; Ridgecrest, $185,000; Yucca Valley, $193,500; and Delano, $202,000.