Numbers of Home Sales INCREASE in California!

According to the California Association of REALTORS®:

LOS ANGELES (May 23) – Home sales increased 2.5 percent in April in California compared with the same period a year ago, while the median price of an existing home fell 32 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Home sales registered a 2.5 percent year-to-year gain compared with April 2007, ending a 30-month string of year-to-year percentage decreases that began in October 2005,” said C.A.R. President William E. Brown. “This is not to say that the credit crunch that has contributed to the sales decline has disappeared. Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to constrain sales.”

Closed escrow sales of existing, single-family detached homes in California totaled 366,720 in April 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 2.5 percent from the revised 357,640 sales pace recorded in April 2007.

The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the April 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 April 2008 was $403,870, a 32 percent decrease from the revised $594,110 median for April 2007, C.A.R. reported. The April 2008 median price fell 2.6 percent compared with March’s revised $414,640 median price.

“Significant price declines are spurring home sales to bargain hunters and first-time buyers at the middle- and low-end of the market, especially in areas with a concentration of distressed properties,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.
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A LITTLE PERSPECTIVE & OPINION:

While the mainstream media continues to report sluggish homes sales in California, the news that sales are actually up (albeit slightly) is perhaps a positive sign. Many attribute this to some foreclosures and short-sales moving into the "under-contract" mode as banks are slowly coming around to accepting less than list-price. This is very positive - in my humble opinion - despite the incredible standards lenders are holding buyers to in regards to originating loans.

Many folks hear about these teaser interest rates in ads and fail to realize that most of that applies to buyers looking for a conforming loan with near perfect credit and full documentation (verification of income & assets). Nearly 9 out of 10 loans that originated in the peak years of 2003-2005 were "stated income". That means they could literally state their income and everyone signed off. That is no longer the case.

There was a time when a lender could get an automated approval (just by entering your data in a computer) and presto: "Congratulations, You're Approved!" would spit out. Today that process has a few more checks & balances.

Now, most of the nearly 300 mainstream lenders that brokers could use in the past have dwindled to less than 50 today! So the guidelines are tougher, the appraisers are tighter, and Wall Street just aren't buying loans like they used to.

The median home in CA has also dropped to $403,870 - a whopping 32% drop from a year ago. Many experts predict we have even more foreclosures and short-sales to hit the market in the next few years as these ARMS make their scheduled adjustment. Many sellers (who counted on refinancing) are a bit out of luck and time. So troubled waters may still be ahead in California.

But hey, it's still a great time to buy - especially if you plan on staying in the market...While no one is proclaiming that we're back in 2005 just yet, I'll take whatever good news we can get!

As always, feel free to contact me anytime with questions or comments. Thanks for taking the time to check the blog out. Have a great day!

Chuck Denton (chuck@eracoastal.com)
(760) 908-8969