California Home Sales Up 38% from 2008

Yesterday was the last day of the California Association of Realtors (CAR) in San Jose.  Thursday the talk was about the ‘new normal’.

• According to the California Association of Realtors, CAR, home sales are now 38 percent higher on a year-to-date basis compared to 2008 and it’s due in large part to the number of distressed properties on the market.
• In the last 12 months more than 500,000 homes were sold throughout the state and about half involved foreclosed properties.

“Everything under $500,000 is moving fast,” says the Realtor group’s president-elect, Steve Goddard. “Those are our first-time home buyers in California using the tax credit that the government is giving them. Forty percent say they’re buying because of it.”

Here are some highlights of C.A.R.’s “2010 California Housing Market Forecast,” presented Thursday at CALIFORNIA REALTOR® EXPO 2009 in San Jose:

• The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year,
• Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.  The expected decrease is do to fewer distressed properties.
• “California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak.  “This follows two years of double-digit sales declines in 2006 and 2007.  Looking ahead, we expect sales to moderate to a more sustainable pace.”
• “After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” CAR   Liptak added.
• “2010 will mark the beginning of the ‘new normal’ for California’s housing market.  This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
• “With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young.
• “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer.  For the year as a whole, home prices are forecast to reach $280,000.
• The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government.”

The impact of distressed home sales hit the Saratoga, CA home sales market later than the state as a whole and to a more moderate degree.  Short Sales and REO accounted for only 13% of Saratoga closed sales in September 2009.

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