California's housing market continued its historic decline in May, as a flood of foreclosed homes for sale drove down the median price paid for a single-family home by a stunning 35% from year-earlier levels, the California Assn. of Realtors reported today.Update: After looking at S&P's constant quality index, which does not show quite as big of a drop, I suspect that part of the $210,000 drop recorded by the California Realtors is due to a change in the mix of housing that is sold.
The median price paid for a single-family home in the state dropped by almost $210,000, from $594,530 in May 2007 to $384,840 in May 2008, the association reported. That drop represents a decline of $3,800 per week, or $549 per day, and is the highest ever measured by the association. The price decline appeared to be accelerating from April to May, as median prices dropped by 4.7% in that period.
“The statewide median price declined 35.3% to $384,840 in May, a record for year-to-year percentage decreases in the median, reflecting the effect of large numbers of short sales and foreclosures in the market,” said association Vice President and Chief Economist Leslie Appleton-Young.
Monday, June 30, 2008
The California Housing Decline is Worse than I Thought
This comes via the Los Angeles Times. The median house price in California fell almost $210,000 in a single year. Wow!
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Even though I don't live in California (thankfully), I love reading the Irvine Housing blog for what is going on in California.
ReplyDeleteLet the market adjust accordingly - without intervention.
ReplyDeletePreliminary June foreclosure data is brutal in Southern California.
ReplyDeleteSan Diego did the best. Their foreclosures only shot up 25% month to month. The reset of SoCal shot up 40% to 50% from May to June! Absolutely brutal numbers.
We're going to have a few large bank failures over the next six months. No one will escape the impact of those failures. Indymac and Downey are about to go under. These will be the first large failures due to the "Alt-A" loans.
We're starting to see most buyers pull to the sidelines. Even the ones who were gung ho 30 to 60 days ago. Its not just oil prices, its the realization that people are not driving in from the exurbs to shop or buy professional services unless they absolutely have to.
To think, this really shouldn't be happening during the summer. The wheels shouldn't be falling off until October or so.
I expect excessive diesel prices to trigger a trucker strike at the port of LA/Long Beach this summer. If that happens... Everyone will feel it too.
Got Popcorn?
Neil
Or it maybe to due the rush of foreclosures that is flooding onto the market. We haven't seen the Alt-A crisis yet. I wonder how that will pan out.
ReplyDeleteThe problems in Housing have turned out to be catastrophic- and will be spreading to the east coast next.
ReplyDeleteAdditionally the collapse of the dollar, soaring oil prices all spell an economy that is in far worse shape then I ever thought.
California ex-pat here! Husband got a job in Missouri and here we are, lounging in freezing temps. But we are super happy to have sold our house in L.A. two years ago, right before everything started hitting the fan. *phew*
ReplyDeleteOur friends and family still living in Socal have seen their housing values drop about $150,000 on average, I would say. 210,000 seems a little steep, but I am sure that has happened in some places.
eek.