In the San Jose, CA market, closings of new homes fell year-over-year in February, and there were signs of weakening market conditions with a percentage fall steeper than that of January 2016. There was a 22.3% fall in new home closings from a year earlier. In comparison, new home closings in the same month last year saw a 4.3% decline year-over-year in January.
A total of 2,144 new homes were sold during the 12 months that ended in February, down from 2,177 for the year that ended in January.
New home closings made up 11.6% of overall housing closings. This is down from the a year earlier when new home closings made up 13.2% of total closings. Following a year-over-year rise in January, closings of new and existing homes sank year-over-year in February.
Pricing and Mortgage Trends
In February, the average price for new home closings was $822,312, a 10.2% decline from last year. This drop compares to a 6.0% rise in January year-over-year.
Average mortgage size on new homes slid year-over-year in contrast to new home prices. Average mortgage size slid by 4.5% from a year earlier, settling at $594,521 in February. In January 2016, average mortgage size on newly sold homes saw a 8.3% surge year-over-year from a year earlier.
Other Market Trends
As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. Single-family home closings grew from 40.5% of new closings in February 2015 to 52.2% of closings in February 2016. Meanwhile, attached units as a percentage of all new home closings slid to 47.8% of closings from 59.5% of closings.
The average unit size of newly sold homes slid 30.9% year-over-year to 1,399 square feet in February 2016. The average size of newly sold homes moved from 1,955 square feet in January 2015 to 1,822 square feet in January 2016.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in February, but did not appear to be dragging the market. Foreclosures and REO closings, taken together, made up 6.2% of existing closings, lower than 8.1% a year earlier. The percentage of existing home closings involving foreclosures dropped to 2.3% in February from 3.9% a year earlier and REO closings moved from 4.2% of existing home closings in February 2015 to 4.0% in February 2016.