According the California Association of Realtors, the median price of an existing home in California increased by 6.2% in June ($578,000) and sales declined by 26.3% compared to the same period a year ago. This is the first time since November 2001 the back-to-back (May and June ’06) monthly median price of California homes have not increased by double-digit percentages. Obviously the market is slowing down in terms of sales but prices continue to rise; however the rate of price increase is declining.
Although mortgage rates softened a bit in July, they had inched up for five consecutive months between February ’06 and June ’06. Thirty year fixed mortgage rates averaged 6.68% during June ’06 compared to 5.58% in June ’05. Rising rates have been one of the factors underlying recent sales slowdown of existing homes.
The ten California cities with the highest median home prices in June 2006 were:
Beverly Hills: $1,877,500
Manhattan Beach: $1,575,000
Los Altos: $1,543,500
Newport Beach: $1,347,250
Mill Valley: $1,294,500
Palos Verde Estates: $1,225,000
La Canada Flintridge: $1.150,000
It is not surprising to note that five of these cities are part of Southern California Riviera and the remaining five are in the San Francisco Bay Area.
The ten California communities that experienced the highest existing home appreciation in June 2006 include: Delano (94%), Beverly Hills (45%), Barstow (37%), Culver City 935.5%), Porterville (45%), Paramount (31.7%), Inglewood (31.3%), Laguna Hills (30.6%), Arroyo Grande (30.5%), and California City (28.3%). None of these cities are in the San Francisco Bay Area; they are mostly in Southern California and Southern Central Valley.
From an existing home annual sales growth (% change –May ’05-May’06)) and price change (same period % change) perspective following is the pattern on a region-by-region basis:
Region Change Sales (%) Change Price (%)
California -26.3 6.2
Central Valley -34.5 2.6
Los Angeles -17.0 11.9
Sacramento -38.7 0.6
San Francisco Ba -21.0 3.6
Riverside/San. Bernardino -33.5 7.4
All of the above regions show a price increase and a sales decline. The only regions that show price declines (not shown above) between June ’05 and June ’06 are: Santa Cruz County, Palm Springs/Lower desert, and Northern Santa Barbara County. There are no California regions that show increasing sales of existing homes for the period.
Undoubtedly residential real estate is slowing down in all regions of the state but price are still holding firm.