In the San Jose, CA market, closings of new homes dropped year-over-year in May, and the market seemed to be worsening in light of the percentage decline steeper than April 2016. New home closings saw a fall of 31.5% from the year earlier to 102. This came after a 24.0% decline 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 8.4% of closings a year earlier. Following a year-over-year decline in April, closings of new and existing homes also slid year-over-year in May.
Pricing and Mortgage Trends
The average value of newly sold homes moved to $880,721 in May 2016 from $883,067 in May 2015. This followed a 3.8% fall in April from a year earlier.
The average mortgage size on newly sold homes increased year-over-year in contrast to the average price of new homes. It gained to $639,167 in May, a 6.5% boost. It went from $634,548 to $628,717 from April 2015 to April 2016.
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. The share of new home closings belonging to single-family homes increased from 37.6% 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 fell to 46.1% of closings from 62.4% of closings.
For all new homes sold, the average unit size fell 20.5% year-over-year to 1,459 square feet in May 2016. In April, the average size of new homes sold went from 1,943 square feet a year earlier to 1,634 square feet.
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. Combined, foreclosures plus REO closings made up 3.8% of existing home 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.