In the San Jose, CA market in May, new home closings dropped year-over-year, and there were hints of worsening market conditions as the percentage fall was steeper than April 2016. New home closings saw a drop of 31.5% from the year earlier to 102. This followed a 24.0% drop year-over-year in April.
A total of 2,060 new homes were sold during the 12 months that ended in May, down from 2,107 for the year that ended in April.
As a percentage of overall housing closings, new home closings represented 6.2%. This is down from the a year earlier when new home closings accounted for 8.4% of total closings. For new and existing homes, closings dropped in May after also declining in April year-over-year.
Pricing and Mortgage Trends
For newly sold homes, the average price moved from $883,067 in May 2015 to $880,721 in May 2016. This came after a 3.8% decline in April from a year earlier.
The average mortgage size on newly sold homes saw a hike year-over-year in contrast to new home prices. In May 2016, the average mortgage size on newly sold homes saw a 6.5% boost from a year earlier. It went from $634,548 to $628,717 from April 2015 to April 2016.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings increased from 37.6% of new closings in May 2015 to 53.9% of closings in May 2016. At the same time, the share of new home closings belonging to attached units declined to 46.1% of closings from 62.4% of closings.
There was a 20.5% fall year-over-year in the average unit size of newly sold homes to 1,459 square feet in May 2016. The average size of newly sold homes moved from 1,943 square feet in April 2015 to 1,634 square feet in April 2016.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in May, but did not look to be a burden on the market. Out of all existing home closings, foreclosures combined with REO closings made up 3.8% of closings, below 4.4% a year earlier. The percentage of existing home closings involving foreclosures went from 2.0% in May 2015 to 1.6% in May 2016 and REO closings moved from 2.3% of existing home closings in May 2015 to 2.2% in May 2016.