CAR: Home Prices Down 41.5%

The California Association of Realtors released their December Sales and Price Report

LOS ANGELES (Jan. 27) – Home sales increased 84.9 percent in December in California compared with the same period a year ago, while the median price of an existing home fell 41.5 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Sales continue to be strong, exceeding 500,000 units for the fourth consecutive month, and year-to-date sales are nearly 27 percent above last year,” said C.A.R. President James Liptak. “California home buyers benefited during the last half of 2008 from the high-cost loan limit of $729,750, which fell to $625,500 as of Jan. 1. The restoration of the high cost loan limit to the previous level would not only help a housing market still struggling to turn around, but also make financing more affordable for home buyers.”

Closed escrow sales of existing, single-family detached homes in California totaled 544,580 in December 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 increased 84.9 percent from the revised 294,520 sales pace recorded in December 2007. Sales in December 2008 increased 5.9 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the December 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 December 2008 was $281,100, a 41.5 percent decrease from the revised $480,820 median for December 2007, C.A.R. reported. The December 2008 median price fell 2 percent compared with November’s revised $286,850 median price.

“Median prices continued to decline in December, and based on preliminary calculations, the statewide annual median price declined 38 percent for all of 2008 compared with 2007,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the month-to-month decrease in December was considerably smaller than in recent months, it remains too early to determine if prices are beginning to stabilize. Many distressed sales still must work their way through the system.

“The decline in home prices has brought the cost of housing more in line with household income, improving affordability across the state,” she said. “This should be especially helpful for first-time buyers who can qualify for a home loan.”

Highlights of C.A.R.’s resale housing figures for December 2008:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in December 2008 was 5.6 months, compared with 13.4 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 5.29 percent during December 2008, compared with 6.10 percent in December 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.97 percent in December 2008, compared with 5.50 percent in December 2007.
. The median number of days it took to sell a single-family home was 46.1 days in December 2008, compared with 66.7 days (revised) for the same period a year ago.
Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 1.5 percent, or 5 out of 338 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for September may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/economics/historicalprices/2008medianprices/dec2008medianprices/

. Statewide, the 10 cities with the highest median home prices in California during December 2008 were: Danville, $1,029,000; Santa Barbara, $952,500; Santa Monica, $825,000; San Ramon, $711,500; Redondo Beach, $682,500; San Clemente, $675,000; San Francisco, $625,500; Arcadia, $625,000; San Mateo, $618,5000; and Carlsbad $615,000.
. Statewide, the cities with the greatest median home price increases in December 2008 compared with the same period a year ago were: Santa Barbara, 12.7 percent, Cerritos, 9.1 percent; Danville, 8.4 percent; Atascadero, 8.1 percent, and San Pedro, 1.2 percent.