Road to recovery: Local housing market showing signs of strength

From the San Gabriel Valley Tribune:

Both the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) released monthly housing reports this week. However, each report told a different story about the housing market.  Nationally, home sales declined but in California home sales rose 14.1 percent in May compared with April and 1.2 percent compared with April 2009. 

MAKING SENSE OF THE STORY FOR CONSUMERS

  • The median price of existing single-family homes in California in May was $324,430, a 23.2 percent increase compared with a median price of $263,440 in May 2009, C.A.R. reported. The May 2010 median price increased 5.9 percent compared with April’s $306,230 median price.
  • While home prices are rising month-over-month and year-over-year, affordability continues to remain at near-record highs.  In the first quarter of 2010, 66 percent of first-time home buyers in California could afford to purchase an entry-level home in the state, according to C.A.R.’s First-time Buyer Housing Affordability Index.
  • Many first-time home buyers in California timed the opening and closing of escrow to capitalize on both the federal and state tax credits, helping propel home sales in May.  Although sales rose in May, the number of home buyers signing sales contracts declined nearly 17 percent compared with April, which C.A.R. Chief Economist Leslie Appleton-Young attributed to the ending of the federal tax credit.  “Although there may be a lessening of demand compared with the first half of this year, the number of escrows opened on a year-to-date basis is about the same as last year, and sales for all of 2010 will be on a par or slightly below last year,” said Appleton-Young.
  • Despite the number of foreclosures listed for sale, the inventory of homes for sale still is below the long-run average of 7-months, according to C.A.R.  In May, C.A.R.’s Unsold Inventory Index for existing, single-family detached homes was 4.6 months, unchanged from the same period a year ago. 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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