Closings of new homes sank year-over-year in September in the San Jose, CA market, and the percentage decline that was steeper than August 2015 gave implications of worsening market conditions. New home closings saw a 9.8% fall from a year earlier to 194. This came on the heels of a 6.0% fall year-over-year in August.
A total of 2,224 new homes were sold during the 12 months that ended in September, down from 2,245 for the year that ended in August.
As a percentage of overall housing closings, new home closings accounted for 11.5%. This is down from the 12.9% of closings a year earlier. Closings of new and existing homes rose year-over-year in September after also rising in August year-over-year.
Pricing and Mortgage Trends
The average price of new homes climbed year-over-year 15.8% in September to $899,285 per unit. This rise is better than the 1.3% surge in August year-over-year.
Average mortgage size on new homes rose year-over-year along with new home prices. It climbed to $654,153 in September, a 15.4% bump. Average mortgage size declined 2.9% in August 2015 from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. The share of new home closings belonging to single-family homes gained from 39.1% in September 2014 to half of closings in September 2015. Conversely, the share of new home closings belonging to attached units declined to half of closings from 60.9% of closings.
There was a 18.6% fall year-over-year in the average unit size of newly sold homes to 1,722 square feet in September 2015. For newly sold homes, an average size drop contrasting with an average price gain was also seen in August 2015 when the average size of newly sold homes sank 3.6% to 2,126 square feet. In August, the average size of new homes sold went from 2,206 square feet a year earlier to 2,126 square feet.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in September, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings made up 3.6% of closings, below 4.9% a year earlier. The percentage of existing home closings involving foreclosures dropped to 1.2% in September from 2.3% a year earlier and REO closings moved from 2.6% of existing home closings in September 2014 to 2.4% in September 2015.