California Clawing Its Way Back

California experienced a small rebound in its real estate market in August, outperforming July and August 2010, and just a ten thousand homes shy of hitting the average number of sales on record for the month according to statistics provided by DataQuick. The average price of homes has dropped in the state and more than half of the sales are comprised of distressed homes that were short sales or in foreclosure, but good news is welcome in a state that has been battered by the slumping sales in the U.S. housing market. 

An estimated 37,734 new and resale houses and condos were sold in California last month. That was up 8.8 percent from 34,695 in July, and up 10.2 percent from 34,239 for August 2010. An increase from July to August is normal for the season.

California sales for the month of August have varied from a low of 29,764 in 1992 to a high of 73,285 in 2005, while the average is 48,344. DataQuick’s statistics go back to 1988.
The median price paid for a California home last month was $249,000, down 1.2 percent from $252,000 in July, and down 4.2 percent from $260,000 for August a year ago. The year-over-year decrease was the 11th in a row after 11 months of increases. The bottom of the current cycle was $221,000 in April 2009, while the peak was $484,000 in early 2007.

Distressed property sales continued to make up more than half of California’s resale market last month.
Of the existing homes sold last month, 34.6 percent were properties that had been foreclosed on during the past year. That was up from a revised 34.5 percent in July and down from 35.6 percent in August a year ago. The all-time high was in February 2009 at 58.5 percent.

Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 17.8 percent of resales last month. That was up from 17.3 percent in July and down from 18.0 percent a year earlier. Two years ago short sales made up an estimated 14.3 percent of the resale market.
The typical mortgage payment that home buyers committed themselves to paying last month was $982, the lowest on record. That was down from $1,027 in July, and down from $1,045 in August 2010. Adjusted for inflation, last month’s mortgage payment was 56.1 percent below the spring 1989 peak of the prior real estate cycle. It was 64.4 percent below the current cycle’s peak in June 2006.

DataQuick Information Systems monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Indicators of market distress continue to move in different directions. Foreclosure activity increased last month. Financing with multiple mortgages is low, down payment sizes are stable, cash and non-owner occupied buying is flat at a high level, DataQuick reported.