C.A.R. Reports Sales Decrease 38.9%, Median Home Price Falls 4.7%

RISMEDIA, Oct. 26, 2007-Home sales decreased 38.9% in September in California compared with the same period a year ago, while the median price of an existing home fell 4.7%, the California Association of Realtors® (C.A.R.) reported.

“While it is typical for the median price to dip seasonally as we move from August to September, this decline — which was both the largest month-to-month percentage decline on record and the first year-to-year decline in more than 10 years — was mainly the result of the credit or liquidity crunch, which also drove sales below the 300,000 mark,” said C.A.R. President Colleen Badagliacco.

“California’s sales fell more steeply than those of the U.S. as a whole because of its heavy reliance on jumbo loans – those above the conforming loan limit of $417,000,” she said. “This speaks to the need to raise the conforming loan limit in higher-cost states like California to more accurately reflect the cost of housing.”

Closed escrow sales of existing, single-family detached homes in California totaled 271,590 in September 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 38.9% from the 444,780 sales pace recorded in September 2006.

The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the September 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 September 2007 was $530,830, a 4.7% decrease over the revised $557,150 median for September 2006, C.A.R. reported. The September 2007 median price fell 9.9% compared with August’s $588,970 median price.

“The impact of the credit crunch spread throughout all tiers of the market in September,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the entry-level portion of the market has been adversely affected by the subprime situation and tighter underwriting standards for much of this year, the high end of the market also saw a decline in sales, as even well-qualified buyers were affected by the lack of funds available for jumbo loans.”

Highlights of C.A.R.’s resale housing figures for September 2007:

- C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in September 2007 was 16.6 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% during September 2007, compared with 6.40% in September 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.66% in September 2007 compared with 5.56% in September 2006.
- The median number of days it took to sell a single-family home was 57.2 days in September 2007, compared with 54 days for the same period a year ago.

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, 17.3%, or 50 out of 289 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.

- Statewide, the 10 cities and communities with the highest median home prices in California during September 2007 were: Newport Beach, $1,435,000; Los Gatos, $1,228,000; Cupertino, $1,050,000; Danville, $1,004,000; Redondo Beach, $847,500; San Clemente, $830,000; Yorba Linda, $825,000; Arcadia, $805,000; San Rafael, $797,500; and Santa Monica, $796,500.

- Statewide, the 10 cities and communities with the greatest median home price increases in September 2007 compared with the same period a year ago were: Tustin, 19.7%; Los Angeles, 18.2%; Arcadia, 14.2%; Carlsbad, 11.1%; Laguna Niguel, 10.1%; Diamond Bar, 8.7%; Cupertino, 8.4%; Redondo Beach, 8%; Reedley, 7.1%; and Newport Beach, 6.3%.

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