Following the expiration of the federal home buyers tax credit, sales of existing, single-family homes in California declined 4.2 percent during the month of June compared with the prior year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) June sales and price report. Meanwhile, the median price of existing homes in California rose 13.6 percent on a year-to-year basis to $311,950.
MAKING SENSE OF THE STORY
- Although the median home price in California rose in June on a year-to-year basis, in month-to-month comparisons the median price declined 3.8 percent, according to C.A.R.’s report. Despite the slight decline in month-to-month home sales, California’s housing market continues to recover at a quicker pace than the national housing market. Nationwide, home sales declined 5 percent in June and the median price rose only 1 percent, according to a report from the NATIONAL ASSOCIATION OF REALTORS® (NAR).
- C.A.R. expects home sales to be lower in the second half of the year due to the absence of the federal home buyers tax credit, but sales should remain above the long-run average and be significantly higher than in 2007.
- According to C.A.R. President Steve Goddard, “It’s important to keep in mind that home prices are substantially below their peaks and interest rates remain at historic lows, making this a very affordable time for many first-time buyers to purchase a home of their own.”
- Home prices continued to post modest gains in June, due in large part to the lean inventory of homes for sale in many regions of the state. C.A.R.’s Unsold Inventory Index rose slightly to 4.8 months in June compared with 4.6 months in May and 4.2 months in June 2009. However, the number of homes for sale remains well below the long-run average of a 7.1-month supply. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
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