Median price of California homes up: Sales Decrease

Concerns about rising interest rates, the spike in energy costs, and the hurricanes late last year could all be reasons why house sales fell last month compared with December 2004’s record-setting pace. The median price of an existing home in California in December increased 15.6 percent and sales decreased 17.6 percent compared with the same period a year ago.

The last few months of 2005 marked the first time since mid-2004 that the fixed-rate mortgage was above 6 percent on a sustained basis and the adjustable-rate mortgage was above 5 percent for three months in a row.

Statewide home resale activity decreased 17.6 percent from the 645,860 sales pace recorded in December 2004. Closed escrow sales of existing, single-family detached homes in California totaled 531,910 in December at a seasonally adjusted annualized rate.

The statewide sales figure represents what the total number of homes sold during 2005 would have been if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The December 2005 median price for an existing, single-family detached home in California remained nearly unchanged compared with November’s $548,680 median price. The median price during December 2005 was $548,430, a 15.6 percent increase over the $474,270 median for December 2004.

Time on the market also is nearly unchanged at 44 days in December compared with 40 days for the same period last year.

Housing affordability in the state remains at record lows, which also is impacting the robust sales trend we experienced throughout much of 2005.

Thirty-year fixed mortgage interest rates averaged 6.27 percent during December 2005, compared with 5.75 percent in December 2004. Adjustable mortgage interest rates averaged 5.17 percent in December 2005 compared with 4.18 percent in December 2004.

The median number of days it took to sell a single-family home was 44 days in November 2005, compared with 40 days for the same period a year ago.

Statewide, the 10 cities and communities with the highest median home prices in California during December 2005 were: Los Altos, $1,427,500; Calabasas, $1,295,000; Newport Beach, $1,080,000; San Clemente, $1,025,000; Rancho Palos Verdes, $1,020,000; Santa Barbara, $1,000,000; Los Gatos, $972,500; Danville, $960,000; Cupertino, $924,000; Mill Valley, $918,000.

Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity.