Median home price in August rises to $250,000 in Tulare County, home sales see steep drop off
By Reggie Ellis @Reggie_SGN
VALLEY – Home prices reached a new high in California this summer. That’s good news from homeowners building equity in their homes but bad news for those still chasing the dream of owning a home.
The median home price rose to a record $617,410 in August up 1.5% from July and up 3.6% from August 2018. According to the California Association of Realtors (C.A.R.), that marks the fifth straight month that the median price remained above $600,000. The annual sales gain was the highest in the last 10 months, according to information collected from more than 90 local Realtor associations and MLSs statewide.
Valley wide home prices rose to $343,000, a slight drop from July but a 5.5% increase over last year, the largest of any region in the state. In Tulare County, the median home price was $250,000, a 2% increase over July and a 4.6% increase over last year. Kings County saw the largest change in Valley home prices increasing 13.5% from last year. Fresno County saw the smallest increase at just 1.8%.
Higher home prices have also coincided with lower interest rates to give buyers more purchasing power.
The 30-year, fixed-mortgage interest rate averaged 3.62 percent in August, down from 4.55 percent in August 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.36 percent, compared to 3.47 percent in August 2018.
“Low interest rates, which helped to reduce monthly mortgage payments, have provided much-needed support to improve housing affordability and elevate home sales over the past few months,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “While lower rates have no doubt boosted buyers’ purchasing power, they have also been a contributing factor to higher home prices this year.”
The higher prices and discussions of an impending recession have scared off some buyers. Sales fell in all major regions, with the Central Coast recording the largest yearly decline at 6.4%. The Central Valley experienced a 2.3% year-over-year decline. The Inland Empire posted a 2.4% yearly decline, and sales in the Los Angeles Metro region dipped 1.1% from last year. In the San Francisco Bay Area sales were down from a year ago by 3.8%, with seven of nine counties recording sales declines from a year ago.
In Tulare County, homes sales were down 23.9% from July and 22.7% from last year, the largest decrease in the state behind Lake County’s 25.5% drop from July and Yuba County’s 35.5% drop from last year.
“Housing demand has exhibited signs of improvement in recent months as lower rates continued to reduce the cost of borrowing for home buyers,” said C.A.R. President Jared Martin. “However, buyers remain cautious, and many are reluctant to jump in because of the economic and market uncertainty that continue to linger, and that is keeping growth subdued despite significantly lower rates.”
The median number of days it took to sell a home increased in August, with a few exceptions including Tulare County. Time on market inched up from 21 days in July to 23 days in August across the state. The Valley’s Unsold Inventory Index, which projects the number of months it would take to deplete the available homes for sale, dropped from 3 months to 2.8 months while the number of days a home stays on the market increased by one day to 17. Tulare County’s index was at 4.3 months, second only to Glenn and Madera Counties (4.7) in the Valley. The number of days a home stays on the market in Tulare County went from 28 to 20, one of the largest drops in the state.