According to an October report by the California Association of REALTORS®, home sales in California increased 96.7 percent in September compared with the same period a year ago, while the median price of an existing home fell 40.9 percent.
Statewide sales in September edged past the 500,000 threshold for the first time in more than two years, rising 2.3 percent compared with August and 96.7 percent compared with a year ago.
"This dramatic increase in sales owes as much to market weakness a year ago in the early stages of the credit crunch, as it does to the growth of sales in September this year," said C.A.R. President William Brown. "We expect the market to register significant year-to-year percentage gains in the coming months as current sales are compared against extremely low numbers that prevailed during the fourth quarter of last year."
Statewide closed escrow sales of existing, single-family detached homes increased 96.7 percent to 502,190 from the revised 255,340 sales pace recorded in September 2007. Sales in September 2008 increased 2.3 percent compared with the previous month.
The median price of an existing, single-family detached home in California during September 2008 was $316,480, a 40.9 percent decrease from the revised $535,760 median for September 2007, the state trade association reported. The September 2008 median price was down 9.6 percent compared with August's $350,140 median price.
"There is still no clear sign that the statewide median price has begun to stabilize, and recent events in the economy and financial system undoubtedly contributed to the steep decline in September, both directly and through weakened consumer confidence," said the C.A.R. Chief Economist Leslie Appleton-Young.
Appleton-Young said the median also will continue to face downward pressure from the large share of distressed sales and a dramatic change in the sales mix. "A year ago, the under $500,000 price range accounted for 46 percent of sales but shifted to 76 percent as of September," she indicated.
Speaking recently to members of the Silicon Valley Association of REALTORS®, C.A.R. Past President Vince Malta said the decline in home prices is making homeownership more affordable. He identified market opportunities that lie with first-time homebuyers, investors and international buyers.
There are many qualified first-time homebuyers out there – renters, new immigrants, newly formed households, and there continues to be down payment assistance and loan options available to them, said Malta. He said FHA has once again become a viable loan option in California.
Malta said he is seeing investors coming back into many of the markets in California, as well as the heavy presence of international buyers, who, coupled with the great affordability and healthy exchange rates, find great opportunities in the California housing market.
The C.A.R. past president also mentioned the window of opportunity still available to buyers who can take advantage of the temporary conforming loan limit of $729,750. This temporary conforming loan limit will disappear on Dec. 31, 2008, and the new conforming loan limit of $625,500 will take effect January 1, 2009. Malta said C.A.R. is seeking to make the $729,750 temporary conforming loan limit permanent.
The C.A.R. report disclosed the Unsold Inventory Index for existing, single-family detached homes in September 2008 was 6.5 months, compared with 16 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate. The median number of days it took to sell a single-family home was 46.1 days in September 2008, compared with 56.7 days for the same period a year ago.
Statewide, the 10 cities with the highest median home prices in California during September 2008 were: Los Gatos, $1,200,000; Newport Beach, $1,172,000; Cupertino, $915,000; Danville, $905,000; Santa Barbara, $900,000; Santa Monica, $863,000; Redwood City, $805,000; San Ramon, $750,000; Pleasanton, $737,000; and Redondo Beach, $720,000.
Statewide, the cities with the greatest median home price increases in September 2008 compared with the same period a year ago were: Culver City, 15.5 percent; Truckee, 7.6 percent; South Lake Tahoe, 6.5 percent; Redwood City, 6.3 percent; Berkeley 5.4 percent; Santa Monica, 1.6 percent; Pleasanton, 1.4 percent; Fountain Valley, 0.4 percent; and Walnut Creek 0.3 percent.
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.
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