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4/29/08
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For those of you hoping for news of a turnaround in California’s residential market, you may not want to read on, although it’s not likely that this news will come as a surprise to anyone who hasn’t had their head buried in the sand for the last half year or so. In the latest figures from the California Association of Realtors® (C.A.R.), CA home sales for March dropped 24.5% from the previous year, while the median price of an existing home in the state fell a whopping 29%.
“Sales continue to be impacted by problems in the real estate finance sector, which by some measures have eroded since the start of the year,” said C.A.R. President William E. Brown. Sales in 2007 reached their peak last February; going forward, the year-to-year declines in sales should shrink.”
Closed escrow sales of existing, single-family detached homes in California totaled 318,830 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 24.5 percent from the revised 422,300 sales pace recorded in March 2007.
The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during March 2008 was $413,980, a 29 percent decrease from the revised $582,930 median for March 2007, C.A.R. reported. The March 2008 median price fell 1.3 percent compared with February’s revised $419,640 median price.
“Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to constrain sales,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Historically, mortgage rates on jumbo loans are 0.2 percent to 0.4 percent higher than those on conforming loans, but the spreads in recent weeks have been as large as 2 percentage points, reflecting an increase in the perceived risk associated with these loans.
“The lack of available funds for loans, even for qualified buyers, continues to keep the demand side of the market thin, and enables buyers with financing (or all cash) to exert leverage over sellers,” she said.
Highlights of C.A.R.’s resale housing figures for March 2008:
• C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2008 was 11.6 months, compared with 7.6 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.
• Thirty-year fixed-mortgage interest rates averaged 5.97 percent during March 2008, compared with 6.16 percent in March 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.12 percent in March 2008, compared with 5.44 percent in March 2007.
• The median number of days it took to sell a single-family home was 56.7 days in March 2008, compared with 52.9 for the same period a year ago.
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