RISMEDIA, March 26, 2008-Home sales decreased 28.5% in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2%, the California Association of Realtors® (C.A.R.) reported this week.”Although sales rose for the fourth straight month in February by 9.5% compared with the previous month, they continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan,” said C.A.R. President William E. Brown.
“It is crucial that FHA reform legislation currently under consideration by Congress include higher loan limits for high-cost states like California,” he said. “The proposed legislation also includes a reduction in the down payment requirement for FHA loans and will include condominiums in the FHA single-family program, which will make it easier for buyers in the condominium market to qualify for loans.”
Closed escrow sales of existing, single-family detached homes in California totaled 343,220 in February 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 28.5% from the revised 480,170 sales pace recorded in February 2007.
The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the February 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 February 2008 was $409,240, a 26.2% decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8% compared with January’s revised $429,790 median price.
“The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year.”
Highlights of C.A.R.’s resale housing figures for February 2008:
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in February 2008 was 14.3 months, compared with 8.2 months 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 5.92% during February 2008, compared with 6.29% in February 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.03% in February 2008, compared with 5.51% in February 2007.
The median number of days it took to sell a single-family home was 68.6 days in February 2008, compared with 66.1 for the same period a year ago.
Regional MLS sales and price information is 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, 5.4%, or 14 out of 257 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 February 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 February 2008 were: Santa Barbara, $1,150,000; Redwood City, $875,000; Danville, $875,000; Encinitas, $842,500; Santa Monica, $787,000; Mountain View, $784,000; San Clemente, $770,000; San Mateo, $750,000; Sunnyvale, $741,750; San Francisco, $737,750; Carlsbad, $675,000.
Statewide, the 10 cities and communities with the greatest median home price increases in February 2008 compared with the same period a year ago were: Encinitas, 25.7%; Santa Barbara, 23.4%; Walnut Creek, 21.5%; Redwood City, 14%; Carlsbad, 10.9%; Sunnyvale, 5.3%; Mountain View, 3.4%; Rancho Mirage, 2.6%; Santa Monica, 1.5%; Los Angeles, 1.5%; Santa Clarita, 0.9%.
For more information, visit www.car.org.