Single-family and condominium sales in California closed 2013 on a cautiously positive note, even though overall sales were down notably from the year prior, according to the latest quarterly market activity report from real estate tracking firm PropertyRadar.
December sales in the Golden State's home and condo market grew 1.4 percent over November 2013 sales, but were down by nearly 20 percent from December 2012. Overall, 2013 property sales—distressed and non-distressed—finished at their lowest numbers since 2007. December also marked the fifth straight month that sales were below those in the same months one year prior.
Madeline Schnapp, director of economic research at PropertyRadar, attributed the drop in sales partly to the 115-basis-point increase in mortgage interest rates that have been in place since May. She referred to the increase as "a drag on the California real estate market." Double-digit monthly increases in median home prices that occurred in 2012 and the first half of 2013 also came to an abrupt stop in June, making median prices more or less unchanged since, she said.
Median sale prices sat at $360,000 since June and increased to $365,000 in November. This is up from the $300,000 median value that marked 2012 sales. PropertyRadar attributed the increase to a shifting mix of distressed and non-distressed home and condo sales between 2012 and 2013.
The biggest drop was in distressed properties, where sales finished 2013 nearly 55 percent lower than they had in 2012. Still, distressed properties made up a quarter of California's sales in December. Distressed property sales were highest in non-coastal counties and reached their peak in MercedCounty, where they made up nearly 38 percent of home and condo sales in December. Foreclosure sales, though up 10 percent from November to December, were also cut in half in 2013 compared to 2012. Cash sales remained relatively stable at roughly 24 percent of sales.
Flipping and investment group transactions eased off in Q4. The number of properties bought and sold within six months dropped 17 percent in November and made a modest 9 percent recovery in December. Overall flip sales in 2013 were slightly lower than they were in 2012, but remain in the range of 1,400 to 1,600 sales per month, where they've hovered since August.
Despite what appear to be ups and downs in a stressed market, PropertyRadar founder and CEO Sean O’Toole was optimistic about his firm's findings. "With the recent rapid price increases, slow down in sales, rising rates, and increasing inventories, I’m predicting that the median price in California will remain relatively flat in 2014, perhaps plus or minus 5 percent," O'Toole said.