California home sales and prices ease in December
As mortgage rates edged higher, California home sales and prices moderated in December. Home sales for the entire year, however, recorded the strongest pace since 2009, exceeding 2020’s level by 7.9 percent, according to the California Association of Realtors. The San Francisco Bay Area had the biggest sales decline, yet the most gain in median price for the year.
Sales of existing, singlefamily homes in California totaled 429,860 in December, down 5.4 percent on a monthly basis from 454,450 in November, and
down 15.7 percent from a year ago when 509,750 homes were sold. Annual home sales rose to a preliminary 444,520 closed sales in California, up 7.9 percent from 2020’s pace of 411,870.
“For the year as a whole, the market turned in its best performance in more than a decade, as buyers took advantage of historically low interest rates and continued to value the benefits of homeownership amid another year of the pandemic,” said 2022 C.A.R. President Otto Catrina.
The statewide median price rose to $796,570 in December, up 1.8 percent from November’s $782,480 and up 11.0 percent from the $717,930 recorded in December 2020. For the year as a whole, California set a new annual record median price of $786,750, improving 19.3 percent from the prior year.
“The state’s housing market is expected to perform solidly this year as the economy recovers further and consumers’ desire to buy remains elevated,” said C.A.R.
Vice President and
Chief Economist Jordan
Levine. “However, with COVID cases surging and inventory constraints remaining an issue, the housing market will see headwinds of ongoing high inflation, which will put pressure on the Fed to raise rates sooner than previously expected. These factors will increase the cost of borrowing and put more affordability burden on potential homebuyers who want to purchase in 2022.”
In Silicon Valley, C.A.R. reports year-overyear home sales were down 17.7 percent in
San Mateo County and down 20.3 percent from November. In Santa Clara County, the number of sales dropped 17.2 percent from December 2020 and was down 21.2 percent from November.
December’s Unsold Inventory Index for both counties was at a low of 0.7 months. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.
San Mateo County’s December median price of $1,945,000 was 14.4 percent higher than the median price of $1,700,000 recorded in December 2020, and 12.5 percent lower than $2,222,500 recorded in November.
In Santa Clara
County, the December median sales price was $1,740,000, 26.5 percent higher than $1,375,000 in December 2020 and 2.8 percent higher than $1,692,500 in November. The county’s year-overyear price gain was the third highest in the state.
“There was a lot of competition for homes in the region last month as both counties had less
than a month’s worth of inventory. There’s some concern that with prices remaining elevated and interest rates edging up that buyers may back out and sit the year out,”
said 2022 Silicon Valley Association of Realtors President Brett Caviness.
Caviness noted while interest rates are moving upward, they are still historically low. He does not believe slightly higher mortgage rates are enough to deter those who feel Silicon Valley is the place to be.
“The demand for homes in Silicon Valley is extremely high and continues to outpace supply. The amenities the region brings are second to few around the world,” said Caviness. “From good weather, top-notch education, diversity, and the base of many tech companies, I think we’ll see many buyers hang tough, betting on the long-term value found only here in Silicon Valley, as they continue to be willing to compete for homes in this area.”