California Home Sales
Jun 29, 2007 by Andrew Hull
Firstly an answer to the question, ‘Why California and not the U.S. ? California's GDP is larger than all but seven countries in the world and California is approximately twenty times the size of Wales (19.96 to be precise) and it is almost tempting to look at either Northern California or Southern California or even just at Los Angeles or San Francisco but we’ll take a look at California as a whole.
It is important to note that the following relates to prices for the whole of California and not to any of the major cities.
A total of 34,949 new and resale houses and condos were sold statewide last month (May 2007) and that's down 12.2 percent from 39,811 for March and down 28.5 percent from 48,894 for April 2006.
Last month's sales were the slowest April since 1995 when 27,625 homes were sold and April sales from 1988 to 2007 range from the 27,625 in 1995 to 66,938 in 2005 and the average is 46,141.
On a year over year basis sales have declined over the last 19 months.
However the median price paid for a home last month was $484,000 which was unchanged from March's record high which was up 3.4 percent from $468,000 for April a year ago.
The average mortgage payment that home buyers committed themselves to last month was $2,258 and that was up from $2,230 in March and down from $2,271 for April a year ago and the peak was in June last year when it stood at $2,372.
The Bay Area
“The Bay Area” means the area around San Francisco and home sales dropped and the prices went up there. Sales decreased on a year over year basis during the last 27 months and last month's sales were the lowest since 5,636 homes were sold in April 1995.
If there were a large number of motivated sellers listing their homes then with sales as slow as this one would expect prices to decline but that doesn't appear to have happened and it seems that both buyers and sellers are simpy biding their time.
Southern California home sales sank to a 12 year low last month led by conspicuous sales drops in the most affordable neighborhoods.
Overall, prices were fairly stable with the declines being largely concentrated in the lower cost markets which were the very hot ones year ago.
Steep drops in the sales of vacation homes
Second home purchases in California dropped very sharply last year as a result of lower appreciation for primary residences as well as growing interest in out of State (not in California) properties.
Record sales of newlybuilt homes
The number of newly built homes sold by builders in California reached their highest level in at least two decades last year because of strong demand and relatively low mortgage interest rates.
California Foreclosures Up Again
The number of default notices sent to California homeowners last quarter increased to its highest level in almost ten years as a result of lack of appreciation, slow sales and post teaser rate mortgage resets and the lending institutions filed 46,760 notices in total.