A summary of the C.A.R. report for May 2007(read the full report below), we note the following:

1-VOLUME of sales decreased 25 percent in May
2-Median Price of a home in California up 4.8% from one year ago.
3-The most impacted by the tightening of lending guidelines and subprime shakeout is the lower end of the real estate market, which has seen greater declines in sales and weaker prices.

How does this affect buyers in the Southern California marketplace?  Buyers are wise to get off the fence if they desire homeownership.  Inventory is the best it's been in years meaning lots to choose from and more flexible sellers.  Interest rates are still around 40 year lows.  Entry level buyers in outer-lying areas may look forward to a more favorable lending environment in 2008, along with stabilizing home values in the lower end.

In more urban and high end markets, prices are still rising and therefore, waiting beyond 2007-2008 may prove futile, at least for the next several years. 

FULL REPORT BELOW:

Monday, June 25, 2007

C.A.R. reports sales decrease 25 percent in May, median price of a home in California at $591,180, up 4.8 percent from year ago

LOS ANGELES (June 25) – Home sales decreased 25 percent in May in California compared with the same period a year ago, while the median price of an existing home increased 4.8 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Concerns about subprime lending will be with us well into next year, but improving economic conditions should bolster consumer confidence in the economy as we move through the second half of this year,” said C.A.R. President Colleen Badagliacco. “However, with prices holding steady or showing marginal declines in many parts of the state, affordability will continue to be a problem even with mortgage rates that remain near historic lows. In a competitive market with a wide range of properties for sale compared with a year ago, those homes that are in top shape and are well priced are in the best position to attract buyers in today’s market.”

Closed escrow sales of existing, single-family detached homes in California totaled 366,370 in May at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 25 percent from the 488,260 sales pace recorded in May 2006.

The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during May 2007 was $591,180, a 4.8 percent increase over the revised $563,860 median for May 2006, C.A.R. reported. The May 2007 median price decreased 1.1 percent compared with April’s revised $597,640 median price.

“The decline in sales continues to be driven by both tighter underwriting standards since the start of the year and the adverse psychological impact of news regarding foreclosures and the subprime situation,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “In particular, the lower end of the market – which is the part of the market that is most affected by the subprime situation – has seen greater declines in sales and weaker prices than the higher end of the market. This will likely be a recurring theme in the coming months.”

Highlights of C.A.R.’s resale housing figures for May 2007:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in May 2007 was 10.7 months, compared with 6 months (revised) for 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.

. Thirty-year fixed-mortgage interest rates averaged 6.26 percent during May 2007, compared with 6.6 percent in May 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.52 percent in May 2007 compared with 5.63 percent in May 2006.

. The median number of days it took to sell a single-family home was 51.7 days in May 2007, compared with 44.5 days (revised) for the same period a year ago.

Regional MLS sales and price information is contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 36.7 percent, or 136 out of 371 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/index.php?id=Mzc1NDY.

. Statewide, the 10 cities and communities with the highest median home prices in California during May 2007 were: Los Altos, $1,680,000; Burlingame, $1,665,750; Saratoga, $1,650,000; Manhattan Beach, $1,455,000; Beverly Hills, $1,425,000; La Canada-Flintridge, $1,420,000; Newport Beach, $1,400,000; Laguna Beach, $1,362,500; Mill Valley, $1,287,500; Los Gatos, $1,225,000.

. Statewide, the 10 cities and communities with the greatest median home price increases in May 2007 compared with the same period a year ago were: La Habra, 57.6 percent; Moorpark, 37.5 percent; San Juan Capistrano, 36.9 percent; Atascadero, 28 percent; Mill Valley, 27.2 percent; Lake Forest, 24.5 percent; Burlingame, 21.5 percent; Hawthorne, 21.4 percent; Dana Point, 19.9 percent; Manhattan Beach, 17.2 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.