Sales Activity down in August with tight inventory, but 6.2 % above last year

The National Association of Realtors reported three straight months of gains for existing home sales May through July, then tapering off in August with a slowdown in price growth. Although there was a positive turnaround in sales to first time buyers, none of the four major US regions experienced overall sales increases in August.

Total existing home sales, including single family homes, townhomes, condominiums and planned unit developments fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a downward revision of 5.58 million in July. Despite last month’s decline, sales have risen year-over-year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).

Lawrence Yun NAR chief economist says home sales in August lost some momentum to close out the summer. “Sales activity was down in many parts of the country last month, especially in the South and West as the persistent summer theme of tight inventory levels likely deterred some buyers,” he said. “The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”

Santa Barbara has a slightly different story month to month but generally follows national market trends overall. One hundred homes sold in August down from 126 in July and 114 in June. The median price however was up in August to $187,500 from $997,000 in July but lower than the $1,252,500 we saw in June. The recent peak achieved in August 2014 was $1,377,500 with a slight increase in inventory helping to moderate prices.

Regionally year to date Santa Barbara east and west of State Street have been the hottest areas. There continues to be buyers wanting to own in the downtown corridor with prices up modestly 2% to 6% respectively. The greatest price increases however occurred in Montecito which was up13% and a robust 32% in Hope Ranch.

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