Closings of new homes in the San Jose, CA market declined year-over-year in January, but the percentage drop was less than that of December 2015, hinting that the market may be strengthening. Closings moved from 113 in January 2015 to 112 in January 2016. This followed a 1.1% fall in December from the year earlier.
A total of 2,175 new homes were sold during the 12 months that ended in January, down from 2,176 for the year that ended in December.
New home closings made up 10.7% of overall housing closings. New home closings were 11.1% of overall closings last year. For new and existing homes, closings grew year-over-year in January after also increasing in December year-over-year.
Pricing and Mortgage Trends
For newly sold homes, the average price increased 7.7% year-over-year in January to $842,760 per unit. This lift is smaller than the 10.0% rise in December year-over-year.
The average mortgage size on newly sold homes saw a bump year-over-year along with new home prices. In January 2016, there was a 8.8% lift in the average mortgage size, reaching $635,758. Average mortgage size increased 7.3% in December 2015 from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings jumped from 47.8% of new closings in January 2015 to 55.4% of closings in January 2016. Conversely, the share of new home closings belonging to attached units sank to 44.6% of closings from 52.2% of closings.
For all new homes sold, the average unit size declined 6.8% year-over-year to 1,822 square feet in January 2016. The average size of newly sold homes moved from 1,980 square feet in December 2014 to 1,962 square feet in December 2015.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in January, but did not look to be a burden on the market. Combined, foreclosures plus REO closings made up 5.7% of existing home closings, below 9.9% a year earlier. The percentage of existing home closings involving foreclosures went from 4.0% in January 2015 to 3.3% in January 2016 and REO closings as a percentage of existing home closings slid to 2.4% from 5.9% a year earlier.