Your C.A.R.
Industry 360°
Transaction Center
Learn & Thrive

Model MLS Rules/Materials

California Model MLS Rules, Issues Briefing Papers, and other articles and materials related to MLS policy.

Code of Ethics Violators

Summaries and photos of California REALTORS® who violated the Code of Ethics and were disciplined with a fine, letter of reprimand, suspension, or expulsion.

Statewide MLS Initiative

An explanation of C.A.R.'s position on MLS consolidations in general and a statewide MLS in particular.

NAR Code of Ethics

The most recent edition of the Code of Ethics and Standards of Practice of the National Association of REALTORS®.

Professional Standards Materials

The California Professional Standards Reference Manual, Local Association Forms, Interboard Arbitration Rules, and other materials related to Code of Ethics enforcement and arbitration.

Housing Market Forecast

Following modest gains in home sales in 2016, California’s housing market will post a nominal increase in 2017.

Housing Matters Podcast

The all-new Housing Matters Podcast is your housing hub for market analysis, economic trends, and housing news.

Stay Connected

Stay connected with the latest releases by subscribing to the products and services that interest you.

Interactive Market Stats

Gain insights on California's housing market through interactive dashboards. Select your metrics and see where the data takes you.

Speeches & Presentations

From outreaches to webinars, the Research and Economics team is sharing their insight on the market and the economy.

Surveys & Highlights

Californians are surveyed annually to gain insights on the housing market from their persepective.

Data Matters - September 15, 2017

Get a roundup of weekly economic and market news that matters to real estate and your business.

Recent Laws

Summaries of legislation and regulation effecting REALTORS® and updates on news relevant to REALTORS®.

Legal News 2017 Laws 2016 Laws

C.A.R. advocates for REALTOR® issues in Washington D.C., Sacramento and in city and county governments throughout California.

Federal Issues State Government Affairs Local Advocacy Resources
PACs and RAF

CREPAC, LCRC, IMPAC, ALF and the RAF comprise C.A.R.'s political fundraising arm.

CREPAC/LCRC Issues Advocacy -- IMPAC and ALF REALTOR® Action Fund
Politics and You

Learn how you can make a difference, by getting involved yourself or by passing along valuable information to your clients.

Get Involved Homeowner Legislative Facts
Top Searches

Supply Constraints and the Change in the Mix of Sales

Email Article
Lock icon
The page you are sharing is not public and requires a car.org account to view.
Send Email
What is this?
Add a quick link to this page from the Homepage when you are signed in
Share Article

August 2012

Supply Constraints and the Change in the Mix of Sales Led to the Recent Price Increase

After a brief market slow-down in June, California home sales bounced back and improved both on a month-to-month basis and on a year-to-year basis.  Sales of existing single-family homes jumped 15.3 percent to 529,230 in July from 459,140 in the same month of last year.  Sales also increased 2.0 percent from 518,680 registered in June 2012, and were up 7.1 percent from last year for the first seven months of the year.  Demand for residential properties remained solid as mortgage rates continued to decline on a weekly basis throughout July, dropping from 3.66 percent on June 28 to 3.49 percent on July 26 (according to survey results produced by Freddie Mac).  The increase in home sales could also be attributed to a bounce back of the consumer confidence in July, as the Pacific West Consumer Confidence jumped from 49.3 in June to 60.7 in July.

Meanwhile, the statewide median price continued to increase on a year-to-year basis for the fifth straight month, recording the highest mark in almost four years at $333,860, as compared to $320,540 in June 2012 and $296,160 in July 2011.  The hike in price was due to upward price pressure resulting from supply constraint, as well as more demand for higher-priced homes.  Unsold Inventory for homes declined 30 percent from the same month of last year and the decrease was more pronounced in the lower-price segments than the upper-priced segments (see Table 1).  This was due in part to the lack of supply in bank-owned (REO) properties, as REO inventory dropped by more than half from the same time last year (Table 2). 

Aug2012 Slide1 

While the tight supply of inventory was putting upward pressure on home prices, it was also restraining sales demand in California in the lower price segments.  Sales under $200k dropped 9.4 percent year-to-year, while sales between $200k – 300k increased modestly by 4.6 percent year-to-year. Sales growth for homes priced above $300k, however, was more robust.  Sales in the $300k -$400k segment increased 17.7 percent from last year; sales for homes priced between $400k and $500k grew 17.9 percent on a year-to-year basis; and sales above $500k surged 27.7 percent from the previous year.

The supply shortage continued to hurt sales at lower-price segments, while sales in the higher-priced segments continued to grow faster than sales in general.  Housing markets such as those in the Bay Area and in Orange County where many high-priced homes were sold experienced double-digit year-over-year gain in sales.  On the other hand, counties in the Inland Empire and the Central Valley region where REO properties dominated showed minimal growth or even decrease in sales, as lack of inventory remained an issue in those areas.  This imbalance between supply and demand ultimately led to a change in the mix of sales that pushed the statewide median price higher.  With inventory expected to remain significantly below the long run average for the upcoming months, the median price will likely be subjected to upward pressure in the foreseeable future.  

Aug2012 Slide2