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REALTOR®: Homes Sales Up in California as Housing Becomes More Affordable

Wednesday, December 3, 2008

According to a California Association of REALTORS® report, home sales increased 117.1 percent in October compared with the same period last year, while the median price of an existing home dropped nearly 40 percent.

"Statewide sales increased significantly in October to 552,750 homes on an annualized basis, the highest sales level since late 2005," said California Association of REALTORS® President James Liptak. "The record gain stemmed primarily from extremely large increases in regions with a high concentration of distressed sales."

Paul Cardus, executive officer of the Silicon Valley Association of REALTORS®, explained at one time, the state saw the median home price increasing because higher-end homes in the market were selling. These days, the state's median price has fallen because it is more difficult to get jumbo loans to finance pricier homes and there has been a significant shift toward a higher portion of sales occurring in lower-cost inland markets.

"These distressed sales are making up a large percentage of the sales transactions and the discounted prices of these homes are pulling the median price down," Cardus said.

C.A.R. reports the median price of an existing, single-family detached home in California during October 2008 was $311,060, a 39.9 percent decrease from the revised $517,240 median for October 2007. The October 2008 median price fell 1.9 percent compared with September's revised $316,960 median price.

A report covering more localized statistics shows 1.6 percent, or six out of 378 cities and communities, showed an increase in their respective median home prices from a year ago. Statewide, the cities with the greatest median home price increases in October 2008 compared with the same period a year ago were Mountain View, 18.6 percent; Alhambra 13.4 percent; Ridgecrest 6.2 percent; and Berkeley, 5.9 percent.

C.A.R. also reports the state's entry-level housing affordability more than doubled in the third quarter of 2008. The percentage of households that could afford to buy an entry-level home in the state stood at 53 percent in the third quarter of 2008, compared with 24 percent for the same period a year ago. In Santa Clara County, the percentage of households that could afford to buy an entry-level home stood at 39 percent in the third quarter of 2008, compared with 33 percent in the second quarter, and 21 percent in the third quarter of 2007.

"Making the conforming loan limit of $729,750 permanent would be a tremendous incentive to help people purchase homes," Cardus said.

REALTORS® say the increase in the conforming loan limit has helped to improve affordability in high cost areas like California. The National Association of Realtors is urging Congress to make the 2008 temporary conforming loan limit of $729,750 permanent. Beginning January 2009, the conforming loan limit will be 115 percent of area median, up to $625,500 in high cost areas, but not less than $417,000.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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