New home closings in the San Jose, CA market dropped year-over-year in September, and the percentage decline worsened from August 2015, indicating the market may be weakening. There was a 9.8% drop in new home closings from a year earlier. This was after the housing market saw 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.
New home closings made up 11.5% of overall housing closings. This is down from the 12.9% of closings a year earlier. Following a year-over-year increase in August, closings of new and existing homes also climbed year-over-year in September.
Pricing and Mortgage Trends
For newly sold homes, the average price gained 15.8% year-over-year in September to $899,285 per unit. This boost is higher than the 1.3% bump in August year-over-year.
The average mortgage size on newly sold homes saw a lift year-over-year along with new home prices. It climbed to $654,153 in September, a 15.4% bump. In August 2015, average mortgage size sank 2.9% 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 jumped from 39.1% of new closings in September 2014 to half of closings in September 2015. Conversely, the share of new home closings belonging to attached units fell to half of closings from 60.9% of closings.
There was a 18.6% drop year-over-year in the average unit size of newly sold homes to 1,722 square feet in September 2015. This decline was opposite the price hike, a pattern also seen in August 2015 when the average size of newly sold homes slid 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 decline from a year earlier in September, but did not look to be a burden on the market. Foreclosures and REO closings, taken together, accounted for 3.6% of existing closings, lower than 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.