LOS ANGELES (Nov. 28) – Home sales decreased 40.2 percent in October in California compared with the same period a year ago, while the median price of an existing home fell 9.9 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle and upper-tier markets in the last few months,” said C.A.R. President William E. Brown. “The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing.”
Closed escrow sales of existing, single-family detached homes in California totaled 265,030 in October 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 40.2 percent from the 443,320 sales pace recorded in October 2006.
The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the October 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 October 2007 was $497,110, a 9.9 percent decrease from the revised $552,020 median for October 2006, C.A.R. reported. The October 2007 median price fell 6.4 percent compared with September’s $530,830 median price.
“We expect further weakness in sales over the next few months as the liquidity crisis plays out,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Both the state and national economies remain fundamentally sound at this time, despite recent developments in the housing market. While there have been mixed signals in recent months, economic growth is expected to continue into 2008.”
Highlights of C.A.R.’s resale housing figures for October 2007:
- C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in October 2007 was 16.3 months, compared with 6.4 months (revised) 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 6.38 percent during October 2007, compared with 6.36 percent in October 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.68 percent in October 2007 compared with 5.56 percent in October 2006.
- The median number of days it took to sell a single-family home was 59.3 days in October 2007, compared with 56.5 days for the same period a year ago.
The important numbers for us are bolded. As you can see the high desert is getting creamed. Sales are down nearly 60% and the median price is down nearly 20%
Riverside/San Berdu are slightly better with sales down nearly 35% and median down 16%.
One thing to remember is that the median is still not showing the actual depth of the price declines. It's obvious by looking at the listing prices of the aggressively priced homes that the "real" price decline is probably running between 30% and 40% in the IE. The median price is probably still being propped up by the ratio of higher priced homes that are selling. Back in the boom years there were more lower priced homes selling but today the bottom end of the market is DEAD. Most of the homes that are still selling are towards the high end. This has the effect of inflating the median. We heard a lot about this effect 6 months ago when the median prices were still going up. You don't hear much about it now that the median is finally falling. The effect is still there however and it is making the price declines appear less than the actually are.