Home sales fell across California and in Los Angeles County during April, but prices continued increasing from year-ago levels in most markets, a trade association has said
In April, sales declined an annual 21.4 percent and slipped 4.1 percent from March, said the L.A.-based California Association.
April continued the sales slide that began at the start of last year’s fourth quarter. The April 2005 sales total was the second-highest since the association began tracking the market.
Sales are softening in part because of high prices and rising mortgage rates. While the latter is still low historically, the 30-year fixed mortgage rate is at its highest point since June 2002. The rate for adjustable mortgages is at its highest since August 2001.
In April, 30-year fixed mortgage interest rates averaged 6.51 percent, up 11.1 percent from 5.86 percent a year ago, according to Freddie Mac. Adjustable mortgage interest rates averaged 5.62 percent in April, up 32.2 percent from 4.25 percent a year ago.
“Concerns about the likelihood of future interest rate increases continue to influence the market,” said association president Vince Malta.
The association annualizes sales each month, which means that 516,960 previously owned single-family houses would change owners this year if each month’s market matched April’s.
A year ago the annualized rate was 658,060 sales.
The report is based on information from 90 associations across the state. Even though sales are falling, Leslie Appleton-Young, the association’s vice president and chief economist, said this could end up being the third-best market.
“We’ve been calling the turning point for three years and we’re finally getting it right.”
The median price, the point at which half the houses cost more and half less, increased an annual 10.2 percent to $562,380 and was unchanged from April. In Los Angeles County, where sales fell an annual 12.8 percent, the median price increased an annual 17.3 percent to $567,480 and inched up 1.9 percent from March.
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“It’s still a good market,” Appleton-Young said. “I just think we have transitioned to a balanced market and it’s just challenging because people have such short memories.”
The latter would be sellers who benefited from strong demand, tight inventories and annual gains of 20 percent or more in the median price.
The association’s report also showed that the median price increased in 84.5 percent of 401 cities and communities, according to a separate report compiled by the association and DataQuick Information Systems.
“We’re seeing price appreciation trend toward a more sustainable rate for the California housing market,” Appleton-Young said.
Inventory is building and hit a 5.6-month supply in April but is still short of a seven-month supply that is considered normal.
Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that the local market has some lingering strength price-wise.
“What you are seeing is the market level off, and hopefully it’s going to come in for that soft landing,” he said.