CALIFORNIA HOME SALES DECLINE IN THIRD QUARTER; SALES UP FROM A YEAR AGO IN SEVERAL MAJOR REGIONS OF THE STATE
LOS ANGELES, Nov. 4 /PRNewswire/ -- Existing California home sales declined during the third quarter, following the previously reported surge in activity which occurred in the second quarter, post-Persian Gulf War period, the California Association of Realtors (C.A.R.) reported.
"It's not surprising that California home sales declined in the third quarter when you remember that just a few months ago we saw a much larger than expected jump in sales activity," said C.A.R. President Mack Powell. "Sales soared 25 percent in the second quarter -- the biggest quarterly jump in more than a decade -- when a huge amount of pent-up demand was released after the Persian Gulf War ended," said Powell, a Sacramento-area realtor.
"While the statewide sales figure has declined since the second quarter, sales were up from the third quarter of 1990 in the Los Angeles, Orange County, Ventura, Monterey and San Francisco Bay areas," Powell said.
Among highlights of C.A.R.'s third quarter housing report:
-- Statewide, 411,850 existing, single-family detached homes closed escrow during the third quarter on an annualized basis -- down 17.5 percent from a revised annualized rate of 499,230 in the second quarter of 1991.
-- Third quarter sales were 3.1 percent lower than the third- quarter 1990 pace, when a revised 424,880 existing homes were sold on an annualized basis.
The annualized figure represents what would be the total number of homes sold during 1991 if sales occurred at the third- quarter pace throughout the year. It is adjusted to account for seasonal factors which influence home sales.
-- Statewide, the median sales price of an existing, single- family home was $202,160 in the third quarter, down 1.6 percent from $205,530 in the second quarter. The third quarter figure, however, increased 5.5 percent from the $191,710 recorded during the comparable period of 1990.
-- The year-over-year increase in California's median sales price resulted from a continued shift in sales to the more expensive coastal regions of the state and a greater proportion of larger home sales.
-- C.A.R.'s Unsold Inventory Index was 12.7 months in the third quarter, up from 10.3 months in the second quarter and 11.8 months in the third quarter of 1990. The Index measures the number of months it would take to deplete the supply of homes on the market at the current rate of sales. A 10- to 12-month supply of homes is generally considered normal for the California housing market.
"The second quarter sales pace was not sustainable in light of the weakening California economy and consumer uncertainty," said Leslie Appleton-Young, C.A.R.'s vice president of research and economics. "Recent drops in interest rates should boost home sales activity as the economy slowly improves during the next few months," Appleton-Young said.
-- As with the detached housing market, sales of existing condominiums declined during the third quarter on a non-seasonally adjusted basis. Statewide condominium sales declined 12.7 percent from the second quarter and 12 percent from the third quarter of 1990. (As previously reported, condo sales soared 66.5 percent on a non-seasonally adjusted basis during the second quarter, compared with the first quarter of 1991.)
"Condominium sales have slowed after the phenomenal increase in activity we saw in the second quarter, but this segment of the market remains very viable for many first-time buyers -- especially those in the more expensive, urban areas of the state," Appleton- Young said. "At $146,440, the statewide median condo price is nearly $56,000 below the $202,160 median sales price for single- family homes," said Appleton-Young.
"Many buyers recognize the affordability advantages of condos," Appleton-Young added. "In fact, a recent C.A.R. survey found that 23 percent of this year's first-time buyers purchased condominiums, up from only 13 percent four years ago."
-- The median sales price of an existing California condominium was down 1.0 percent from $147,860 in the second quarter to $146,440 in the third quarter. The median condo price, however, was up 1.7 percent from the $143,960 registered in the third quarter of 1990.
-- The Unsold Inventory Index for condominiums was 12.2 months during the third quarter, up from 9.7 months in the second quarter and 8.8 months in the third quarter of 1990.
-- Mortgage interest rates remained favorable during the third quarter. Fixed-rate mortgages averaged 9.28 percent in the third quarter, down from 9.53 percent in the second quarter and 10.11 percent in the third quarter of 1990, according to the Federal Housing Finance Board. Adjustable-rate mortgages averaged 7.06 percent in the third quarter, down from 7.28 percent in the second quarter and 8.35 percent in the third quarter of 1990.
Here is a look at sales and price results for several major regions of California:
Closed escrow sales of existing, single-family homes in the San Diego Region declined 6.2 percent during the third quarter on a non-seasonally adjusted basis and were down 1.3 percent from the third quarter of 1990. The third quarter median home price in the region was $191,790, up 1.7 percent from $188,560 in the second quarter and 2.8 percent from $186,610 in the third quarter of 1990.
Central Valley Region home sales were down 7.9 percent from the second quarter on a non-seasonally adjusted basis and down 21.4 percent from the third quarter of 1990. The median home price in the region slipped 0.9 percent from $120,690 in the second quarter to $119,550 in the third quarter and 2.0 percent from the $122,050 median price reported a year ago.
In the Sacramento sub-region of the Central Valley, detached home sales dropped 16.8 percent from the second quarter on a non- seasonally adjusted basis and were down 31.1 percent from the third quarter of last year. The median home price dipped 0.3 percent from $139,190 in the second quarter to $138,740 in the third quarter and 3.2 percent from third quarter 1990, when the median- priced home sold for $143,280.
Third quarter home sales in the Los Angeles Region fell 9.5 percent on a non-seasonally adjusted basis but were up 8.9 percent from the third quarter of 1990. The median home price edged up 0.3 percent from $219,570 in the second quarter to $220,290 in the third quarter and was up 4.3 percent from $211,300 a year ago.
Orange County Region home sales were down 11.3 percent in the third quarter on a non-seasonally adjusted basis but were up 4.5 percent from the comparable period a year ago. The median-priced home in the region sold for $242,150, up 0.7 percent from $240,470 in the second quarter and 0.2 percent from the $241,700 reported in third-quarter 1990.
In the Ventura Region, existing home sales were down 12.8 percent from the second quarter on a non-seasonally adjusted basis but were up 25.0 percent from the third quarter of last year. The region's median home price edged up 0.2 percent from $236,150 in the second quarter to $236,570 in the third quarter. The third quarter figure was down 0.6 percent from the comparable period a year ago, when the median-priced home sold for $237,880.
Detached home sales in the Riverside/San Bernardino Region fell 13.8 percent during the third quarter on a non-seasonally adjusted basis and were down 15.7 percent from third quarter 1990. The median-priced home in the region sold for $137,630, up 2.5 percent from $134,250 in the second quarter and 4.0 percent from the $132,360 recorded in the third quarter of 1990.
Third quarter home sales in the San Francisco Bay Region dropped 24.8 percent from the second quarter on a non-seasonally adjusted basis but were up 0.9 percent from the third quarter of 1990. The median price of a home sold in the region was $261,990, down 1.2 percent from $265,220 in the second quarter but up 0.1 percent from $261,610 in third-quarter 1990.
C.A.R. median price and sales data for detached homes are based on reports from 80 boards of realtors around the state. Median condominium price and sales data are based on a survey of 32 Boards. Median prices for both detached homes and condominiums are based on closed escrow sales. Sales revisions reflect the re- seasonalization of the monthly sales data using seasonal factors calculated with the 1979-1990 sales.
The California Association of Realtors is a statewide trade association with more than 135,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
THIRD QUARTER 1991 REGIONAL SALES AND PRICE ACTIVITY(a)
Regional and Condo Sales Data Not Seasonally Adjusted
Percent Percent Percent Percent
Change Change Change Change
in in in Sales in Sales
Price Price Activity Activity
Median from from from from
Price 2nd Q 91 3rd Q 90 2nd Q 91 3rd Q 90
Calif. (sf) $202,160 -1.6pct. 5.5pct.-17.5pct. -3.1pct.
Calif. (condo) $146,440 -1.0pct. 1.7pct.-12.7pct. -12.0pct.
Central Val. $119,550 -0.9pct. -2.0pct. -7.9pct. -21.4pct.
High Desert(b) $105,810 4.1pct. -2.1pct. -9.5pct. -19.2pct.
Los Angeles $220,290 0.3pct. 4.3pct. -9.5pct. 8.9pct.
Monterey $237,990 0.3pct. 2.4pct. -3.5pct. 20.9pct.
Nor. Calif. $132,930 -3.3pct. -7.4pct. 10.0pct. -19.8pct.
Nor. Wine Co. $191,120 4.5pct. 5.6pct. -9.4pct. -9.8pct.
Orange Co. $242,150 0.7pct. 0.2pct.-11.3pct. 4.5pct.
Lwr. Desert(b)$126,320 -1.3pct. 6.5pct. -9.2pct. -20.6pct.
Riverside/S.B. $137,630 2.5pct. 4.0pct.-13.8pct. -15.7pct.
Sacramento $138,740 -0.3pct. -3.2pct.-16.8pct. -31.1pct.
San Diego $191,790 1.7pct. 2.8pct. -6.2pct. -1.3pct.
S.F. Bay $261,990 -1.2pct. 0.1pct.-24.8pct. 0.9pct.
Sta. Barbara(b)$207,260 -9.8pct. 0.5pct.-14.5pct. -2.7pct.
Sta. Clara $268,640 -1.7pct. -0.4pct.-28.9pct. -7.3pct.
Ventura $236,570 0.2pct. -0.6pct.-12.8pct. 25.0pct.
(a) Based on closed escrow sales of single-family, detached
homes only (no condos). Reported month-to-month changes in
sales activity may overstate actual changes because of the
small size of individual regional samples. Movements in
sales prices should not be interpreted as measuring changes
in the cost of a standard home. Prices are influenced by
changes in cost and changes in the characteristics and size
of homes actually sold.
(b) Due to the small sample size in these areas, prices and
activity changes may be overemphasized.
Note: sf - single-family detached
A comparison of median home prices by region for the third quarter of 1991 and the third quarter of 1990.
3rd Quarter 3rd Quarter
California (sf) $202,160 $191,710
California (condo) $146,440 $143,960
Central Valley $119,550 $122,050
High Desert $105,810 $108,040
Los Angeles $220,290 $211,300
Monterey $237,990 $232,440
Nor. California $132,930 $143,590
Nor. Wine Country $191,120 $180,900
Orange County $242,150 $241,700
Palm Springs/Lwr. Desert $126,320 $118,650
Riverside/San Bernardino $137,630 $132,360
Sacramento $138,740 $143,280
San Diego $191,790 $186,610
San Francisco Bay $261,990 $261,610
Santa Barbara $207,260 $206,140
Santa Clara $268,640 $269,670
Ventura $236,570 $237,880
/CONTACT: Lotus Lou or Jeff Hershberger of the California Association of Realtors, 213-739-8304/ CO: California Association of Realtors ST: California IN: FIN SU: SE -- LA002 -- 0674 11/04/91 11:02 EST