Sales up, Prices still down in California

Posted by: Chris Palmeri on May 19, 2008

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Has the giant and once-red hot California market hit bottom? I am reminded by the words of my former colleague who recently decided to put his house on the market after retiring. I asked if this was the time to sell. He said during the last downturn, in the 1990s, it took eight years for his house to regain its former value. He didn’t want to wait that long.

But the latest numbers from housing research DataQuick shows home sales rebounding. A total of 15,615 homes were sold in Southern California, up 22% from the previous month. Some caveats to the data: that sales number was still down 19% from April of last year. It represents that weakest April since 1995.

Prices too are still declining, the median home price for the month was $385,000, down 28% from the same period last year. But DataQuick noticed some positive signs. Two-thirds of the homes sold were under $500,000 in price. Which means families and first time buyers were stepping up to take advantage of some the steep discounts in the market recently.

Reader Comments

Rational expectations

May 19, 2008 6:35 PM


Do we know that "families and first time buyers were stepping up"? Who is buying these homes? Given the prices, and the fact that many are REOs, I wonder if a big chunk of this buying is not investors seeking to hold properties or rent them.

Jim D

May 20, 2008 12:43 AM

Used house sales went up in the spring. In other news, water is wet. YOY is the only valid number... Unless you want to figure out the seasonal adjustment. I'm having a hard time beleiving you didn't already know this. Worst since 1995 is the real headline.

DontGetSuckerIn

May 22, 2008 4:25 AM

This is another story to prop-up real estate prices masqueraded as news. It is amazing how many real estate stories are published talking about the hugh discount available to buyers in the past and current years. Suckers who bought-in last year lost about 30% equity at this same time last year. Suckers who bought-in 3 months ago lost about 15% of equity. The hungry Wolves-in-sheep's clothing, and the man-eating sharks are desperately hunting because their real estate porfolio have collapsed. These hungry creatures will have hired clever Madison Ave Spin Doctors who spin out stories about how the real estate market is recovering so you must buy now. Truth, honesty and morality takes a backseat to money,money,money and realestate,realestate,realestate. With the world wide internet available for news manipulation, you can see the real estate con-artist's deception at work almost everyday. Facts: This recession will be long, deep, and severe even if your government does not offically announce it. The liquidity crisis will continue. The real estate market will continue to decline. Be skeptical. Don't get suckered in by these con-artist.

Shelley

May 30, 2008 3:11 PM

Rational expectations:
"Do we know that "families and first time buyers were stepping up"? Who is buying these homes? Given the prices, and the fact that many are REOs, I wonder if a big chunk of this buying is not investors seeking to hold properties or rent them."

You don't know me, but I am one of them closing on a short sale next week. I am certainly not an investor, but only a first time homebuyer that never though the california market would come dowm far enough for me to buy in.

DontGetSuckerIn: "Suckers who bought-in last year lost about 30% equity at this same time last year. Suckers who bought-in 3 months ago lost about 15% of equity."

I'm not a sucker and I do realize that home prices will continue to go down, but I do believe they will level off in So. Cal. at least soon. Even so, I looking to stay for many years so loss of equity in the short term is not a hassle to me.

jdizzzel

July 21, 2008 7:06 PM

WoW so much stuff to do. I'm looking to buy in california too. how long should I wait? untill next year?

BD Manager

February 27, 2009 4:17 PM

My husband and I recently moved to the Northern California area a year ago. When we came prices were too high to buy the house we expect so we rented. We had no expectation of buying since we still own our previous house in GA and are renting it out. But we've been watching and since it's hitting the low we have two offers in on short-sale homes in our area.

The extreme downturn was just enough to push us over the edge to make an offer. Who could refuse a 2006, 3,200 s.f. home in an amazing area for $299,000? If we are smart and planning for our future with children etc. we'll buy now and put up with a little bigger house than necessary for the future.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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