Single-family home and condominium sales in California experienced a month-over-month increase of 3.9 percent for July but saw a 9.2 percent decline year-over-year, according to PropertyRadar's July 2014 Real Property Report for California.
Sales for single-family homes and condos for the first seven months of 2014 year-to-date are at their lowest levels since 2008, the report stated.
Several factors contributed to the significant year-over-year decrease in California home sales, which fell in 13 of the state's 26 largest counties, the report said. A major reason for the decrease was the decline in distressed property sales. In July 2014, 17 percent of home sales were distressed properties, down from 25.6 percent in July 2013. PropertyRadar reported that rising interest rates and affordability due to price increases were also factors in decreasing home sales.
"Lackluster sales volumes so far this year should come as no surprise given the fact that in many California counties houses have simply become unaffordable," said Madeline Schnapp, director of economic research for PropertyRadar. "The decline in affordability in concert with the rapid decline in lower priced distressed properties for sale has exacted a toll on demand."
The median price of a home in California in July edged slightly upward by 0.3 percent ($1,100) to $390,000, the smallest month-over-month gain since January 2014, according to PropertyRadar. Compared to July 2013, median home prices shot up 7.8 percent from the previous month. The slight uptick in median home price from June to July this year was fueled by a 4.4 percent month-over-month increase in the sales volume of more expensive non-distressed properties, which comprised 83 percent of total sales in July 2014 as opposed to 74.4 percent a year ago.
Other highlights from the PropertyRadar report for July 2014 for California include:
- Cash sales comprised a significant percentage (21.6) of all sales even they have been falling since they reached their interim peak of 36.5 percent in August 2011.
- Negative equity continues to decline but is still high. More than one million homeowners in California (12.1 percent) are underwater on their mortgage.